From

:
Sent:
To:
Subject:
Shi reman, Bob
Saturday, May 01 , 201 08:04 AM
Shelton, Jim
RE: Touching Base
In stead of
be f or you to
li sten t o my speech and t hen we can t alk . You can f ind it her e:


- Bob
,, _.
(b)(6)
(b)(6)
meTrylngTo exPTal n wnat I sai d or what I meant , probably the best thing would
From: Shelton, Ji m
Sent : Sat ur day, May al, 2010 6: 57 AM
To: Shi reman, Bob
Subj ect : Touching Base
11 _" n _L
(b)(5)
Best,
Ji m
---_._------ -------- --- ---
Sent using Bl ackBerry
63
From:
Sent :
To:
Subject:
(b)(5)
From: Joanne Weiss [joanne@gourdinfamily . com]
Sent : Monday, May 03, 2010 9:04 PM
To: Ka nter, Mart ha
Cc: Wei ss, Joanne
Subject : FW: Checki ng I n
Another concer ned friend in the f or -pr of i t higher educat ion space. How shoul d we repl y?
Joanne
From: Hughson, Willi am [mailto:whughson@devry. edu]
Sent : Friday, April 30, 2010 10:57 PM
To: j oanne@gourdinfamily. com
Subject : Checki ng In
Hi , Joanne
Hope al l 's well with you and t hat you' r e enj oying your new j ob!
It' s been quite a whi rlwi nd for me, moving to Chicago and get t ing set t led into my new j ob.
My two l i t t l e girls, now aged 3 Yo and 1 Yo are both doing wonderfully, and are the joy of my
life .
The arti cl e below, about Bob Shi r eman's remarks t o state education r egulators , i s quite
concer ni ng t o me . Why does Bob think we serve our st udents poorly? No one seems t o think
t hat For d' s or Ap ple' s increasi ng market share means t hat t hey are cor r upt or servi ng t heir
customer s poorly. In fa ct, quite to t he contrary, I t hi nk that most of us assume t he reason
is that they are doing a bet t er j ob of appealing t o consumers who have compl et el y free choice
as to whose product s t o purchase . The f act t hat our Pell grant s ar e growing ref lects t he
same under lyi ng reality: that st udent s have free choi ce, and t hat they are choosing us.
Why? For the same r eason t hat they are choos i ng Ford and Appl e pr oduct s : we pr ovi de a great
educat ion , in f ormat s which r ecognize the complex r eal ities of our st udents ' lives, combi ned
wi t h outstandi ng st udent ser vi ces - incl udi ng career services .
I have spent a great deal of my f irst seven mont hs with DeVry touring the 29 campuses which
report t o me . At each campus, I st r es s t he impor tance of pr ovidi ng outstandi ng education and
outstanding st udent ser vice . I also emphasi ze t he i mport ance of adheri ng strict ly t o our
regulatory compl iance guidel i nes . I spend hour s speaki ng wi t h st udents, fa culty and
admi ni stration. About half of t he hundreds of students I have spoken wi t h t ol d me t hat t hey
chose DeVry because a boss, col league, fri end or famil y member r ecommended us . What better
evi dence coul d there be t hat we are ser ving our student s wel l ?
Our "competition" - primarily publi c institutions - j ust don't serve their students all that
wel l . All of us wish t hey woul d, because t hat would be better for soci et y. But they don' t.
I t seems to me t hat ED ought to be mor e conce r ned wi t h helping publi c inst itutions t o provi de
48
good education and service to t hei r st udent s t han wi t h gett ing mad at us because we do. The
situat ion seems very compa rable to t he public schools and t he teachers ' uni ons who get mad at
As pi re. Rat her ,t han waste t hei r t ime getti ng mad at Aspi re, t hey ought t o spend their t i me
and resources f i gur ing out how to provide better educat ion themselves . If t hey did a good
job i n t he fi rst place, As pi re woul d never have come to be. The same is t r ue of privat e-
sector post- secondary education.
I would very mu ch val ue your i nsights i nto t his, because it is very concer ni ng to me and my
col l eagues.
Thanks!
Bill Hughson
President, Heal thcar e Group
DeVry I nc.
3005 Hi ghl and Parkway
Downers Grove, Il 60515
Direct: 630-515-3138
Mobile: 331-645-3906
Our Purpose : Empowering our st udent s t o ac hieve t heir educat ional and career goals .
From: Jamie Morl ey [mai l t o: jmorley@useducat i oncor p. com]
Sent : Friday, Apr il 30, 2010 2:35 AM
To: Montgome ryX, George; Hu ghson, Wi lliam; Thomas Bloom; Jeff Akens
Subject: FW: Inside Hi gher Ed: Shi reman's contempt for accreditors
Thi s was forwar ded from ACr CS' r egul at ory department . I highl i ght ed t he r efer ence t o DeVry .
Jamie
Jamie Morley, ph. D.
Vice Presi dent , Academic Affairs
U. S. Ed ucat ion
1001 Menaul Blvd. NE
Al buquerque, NM 87107
505-353-3931 phone/ f ax
505-514-6901 blackberry
j morley@useducat ioncorp.com< ma i lto:j mor ley@used ucationcor p. com>
Thi s message and/or any at tachments cont ai n confident ial, non- publ ic inf ormation. Thi s
message should not be f orwar ded except t o t hose per sons wit h a need to know such i nforma tion
f or l egi t imat e purposes . If you are not the intended r eci pi ent s , please notif y sender and
delete thi s message from your syst em.
From: Ant hony Bieda [mailto:ABieda@aci cs.org]
Sent : Thursday, April 29, 2010 7:25 AM
To: Director s
Cc: Commissioners
Subject : In side Higher Ed: Shi reman's contempt for accreditors
FYI . looks li ke we have some addit ional out r each to do wit h fol ks i n hi gh places.
Anthony S. Bieda
ACICS Direct or of Ext ernal Affairs
750 1st St r eet NE, Sui t e 980
49
Wa shington, DC 28882
282. 336.6781
202. 905 .6845 (cel l)
"Empowering Workforce Educati on: 2818 ACICS l eadership Conference & Meeting"
June 8th and 9t h - Palazzo Resor t , las Vegas Comparing Hi gher Ed t o Wall St reet Apri l 29,
2010
Whenever worri ed l eaders of for - profi t col l eges have i mpl ied in r ecent months t hat the u. s .
Education Department is gunning for the instituti ons . of f icials of the f ederal agency have
di scouraged such t alk. <http: / /www.insidehi ghered . com/news / 2999/86/16/ cca> of fer i ng evenhanded
rhetori c about treating al l sectors t he same i n their push f or i nc reased account ability.
The wor ds have provided littl e reass urance t o the colleges , si nce they haven't always seemed
t o square with the aggr essive approach<htt p://www. i ns i dehigher ed.com/ news/ 2919/84/21/gai nf ul>
t he Obama admi nistrat ion is taki ng i n rewriting federal r ules governing vocational and ot her
programs .
On Wednesday, in a s peec h to st ate regulat ors who oversee f or - pr of i t col leges . the chief
archi tect of the Education Department ' s st r ategy, Robert Shi r eman, offe red a mu ch more
cr i t ical assessment of the pri vat e sector institutions than he has i n hi s publi c comments t o
date, according t o accounts given by several people who we re in the r oom. He compared the
i nst itut ions r epeat edly t o the Wal l St reet firms whose behavi or l ed to the f inanci al meltdown
and cal led them out indi vidually, one by one, for the vast and qui ckly i ncreasi ng s ums of
f ederal st udent aid money t hey are drawing down .
Wh ile Shi reman's comments we re aimed most directly at t he f or - pr of i t colleges themselves ,
they may be most not eworthy f or hi s i ndictment of accredit at i on. higher educat ion's systemof
inst ituti onal peer r evi ew. In Shi reman's narrat i ve befor e t he annual
meet ing<http : / /www.nasasps . org/ conf erence/regi stration-mat erials > of the National As sociation
of State Admi nist r at ors and Supervisors of Pri vate Schools, the accredi ting agenci es are to
t he f or-prof it col leges what t he Wa l l St reet rati ngs agenci es were t o t he mi sbehaving
fi nanc i al fi r ms : entiti es charged with r egulating an industry that has grown t oo qui ckly and
t oo complex f or them t o cont rol , and that have an "inherent conflict of int erest" because
t hei r existence depends on financi al cont r i but i ons from t hose t hey r egul at e .
Acc reditors lack t he "fi repower" t o regul ate t he fo r- profi t sector. and the st ates and the
f ederal gover nme nt don' t necessarily have al l the t ool s t hey need to do it either , Shi reman
sai d. accor ding to the not es of severa l in the audience. That , he sugges t ed, is why the
Ed uc ation Department must toughen i ts rul es in the way it is now proposing.
Shirema n coul d not be reached for comment . and an Educati on Department s pokes man sai d i ts
officials did not wis h to comment on t his art icle.
To several people i n t he audience, Shi reman's comments r epresented a mu ch more candi d ( and
critical ) apprais al of t he for -pr ofit sector than he has off ered publ i cl y si nce he became
deputy under sec ret ary of education almost exact ly a year
ago<http://www.i nsi dehighered.com/ news/2999/ 04/ 21/shi r ema n> . Ma ny s upporters of t he educat i on
companies f eared his appoi nt ment because they believed his track r ecord as an advocat e f or
l ow-income st udent s and a f oe of st udent debt woul d r esult i n a crac kdown on t he
i nstit ut ions. whose st udents are di sproportionat ely needy and di sproportionat ely go i nto
heavy debt <htt p: / / www .insidehighered. com/news /2919/94/27/debt > t o finance their educat i ons.
But with Wa l l St r eet analyst s hangi ng on hi s eve ry
word<ht t p://www. i nsi dehighered.com/ news/2999/ 96/91/qt #299115> l ooking f or sni ppets t hat mi ght
t hr eat en t he publ icly traded companies ' stock prices. Shi rema n has oft en seemed t o go out of
hi s way t o avoi d si ngl i ng the i nstit utions out fo r crit icism.
50
A typi cal quotat ion, f romlast summer: <http: / /www. i nsidehighered. com/ news/ 2ee9/ e6/ 16/ cca>
"Our overall goal at t he Depar t ment of Educat ion i n postsecondary education i s to make sure
t hat st udents ... have the i nformat ion they need to make good choi ces , and t hat t hey have
good qual ity post secondary education that ser ves bot h t hemas st udents and taxpayers as
well, " Shireman said . ".. . I f there i s not qua lity, we want to know about it and if we can, we
want to do somet hi ng about it . Whet her that i nvol ves a publ i c i nstit ution, a nonpr of i t , a
for -pr ofit, a two-year, a f our -year , a trade program, whatever type or sector of i nst i t ut i on,
we want to do all we can to ma ke sure that we have good qualit y. "
Different Tone
I n hi s comme nt s Wednesday, Shi r eman laid out t he cont ext under l ying the Obama
admi nistration' s elevation of hi gher educat i on as a cent r al focus of its domest i c policies.
The economi c slide cr eat ed in part by t he collapse of t he cr edi t market s has sent Americans
st r eami ng back t o college i n r ecor d number s, and has made it mo re imper at i ve t han ever t hat
more Americans get a hi gher education to st r engt hen t he count r y's economic base for the
futur e, Shi reman sai d.
The admi nistration has poured tens of billions of dollar s i nto Pell Grant s and r estructur ed
the federal st udent l oan programs to t ry to ensure t hat Ameri ca ns have access t o higher
educat ion, Shireman sai d Wednesday . Many publ i c institutions , f aci ng cuts i n t heir state
f undi ng, have had to l imi t or even cut their enrol l ment s, r educi ng t heir abi lity to meet t he
i ncreasi ng demand f r om st udents .
The for -profit col leges, by cont r ast , have stepped up, seeing t heir enrollment s expl ode --
and wi t h t hem, t he amount of Pel l Grant money t hat f ollows t he st udent s to the i nstitutions,
Shireman sai d. Anyone i n t he audience f r omCori nt hian Col l eges? Shirema n as ked t he assembled
audience Wednesday.
A hand went up. The Califor nia -based f or- profi t hi gher ed company has seen its r evenue from
Pel l Grant s grow by 38 percent in the fir st t hree quarters of t hi s fi scal yea r compar ed t o
t he l ast one, he sai d. Anyone from DeVry? Forty-two percent inc rease, Shi r eman sai d. ITT?
St r ayer ? One by one, he ticked th r ough a li st of publicly traded compani es, point ing out t he
i ncr easi ng amount s of federal money t he institutions were collecting ("It wa s like fourt h
grade, with a teacher scol di ng st udent s over their grades, " sai d one person who was i n t he
room) .
What are taxpayer s and st udents gett i ng in return for t hat investment ? Shireman asked. I t ha s
hi storically been up t o t he "triad" -- the t hree- headed r egul at ory scheme i nvolvi ng t he
f eder al government , st at e government s and accrediti ng agenci es -- to ensure acces s, quality
and integrity i n hi gher education, he sai d.
But i s t hat regulatory system up t o the job? To dr aw a par allel, Shi r eman noted that as t his
meeting was unf ol ding in St . Paul, politicians back in Was hington we re debati ng possi ble
r eforms of Wall St reet , to t ry to fix t he "fl awed" r egulat ory proces s t hat all owed Goldma n
Sachs and ot her pur veyors of subpr i me mor t gages to engage i n mi sbehavi or t hat hel ped
devastate t he economy.
One major r eason t he process was f lawed, Shi reman sai d, was because the bond rating agencies
t hat were supposed to be judging t he r i ski nes s of t he fi nancial i nstrument s were suppor t ed i n
l arge part by f ees from the compani es that were aski ng the agencies to rate t he fi nancial
i nstr ument s - - "a cl ear, i nherent conflict of i nt erest, " Shi reman sai d, accordi ng t o t he
accounts of sever al in t he room.
On top of that i nherent confli ct, t he ra tings agencies have been st r uggl i ng to keep tabs on
i ndustri es t hat gr ew quickly and adopt ed i nc r eas i ngl y compl ex practi ces, Shirema n said,
51
suggesting t hat t he rati ngs agenci es l acked the "firepower" t o regulate the fi nancia l
markets .
In case anyone missed i t , Shireman drove hi s point home, point ing out that higher educat ion
accrediti ng agencies are made up of ( and f i nanci al l y support ed by) t heir member col leges, and
see it as t heir mis si on both t o help t he instituti ons "i mprove" and also to ensur e, in what
i s essentiall y a subcont ract f romt he f ederal gover nment, t hat t hey are of suf f i ci ent
qual i ty . They are nonprof it , unli ke t he ratings agenci es , but they ar e run by the
inst i t utions t hey regul ate, in ways t hat t he cr edi t agencies aren' t .
The peer review natur e of hi gher educat ion accreditation has an inherent conf l i ct of i nter est
simi l ar to the r atings agenci es , Shireman sai d. Given t hat , he suggested, i t i s cr uci al for
state and federa l agencies, as the other two par t s of the t r i ad, t o step up their role i n
regulat i ng hi gher educat ion .
But do st at e r egul ator s t hi nk t hey have t he "fi r epower" to keep t abs on t he big, growing and
compl ex pr i vat e market col lege sect or ? Shi reman asked the st ate of f i ci al s i n t he r oom. The
r esponse was underwhelming. "I don' t t hink we feel we have the fi repower we need, " Shirema n
sai d, r eferri ng t o t he fede ra l gover nment ' s own powers , accor di ng t o member s of the audi ence .
The bot t om line of Shi reman's t al k, he said, was that "federal and st at e government s cannot
rely on accredit or s to assur e that consumers and taxpayers ar e protect ed to f ul l extent that
they need t o be . All three l egs" of the thr ee-legged stool of hi gher education quality
assurance need t o be oper at i ng effectively, he said .
Shi r eman went f rom there i nto a r evi ew of the department ' s proposed new approaches t o
ensur i ng integr ity i n the fi nancial aid programs , such as r equ i r ing most for- profit col leges
and non-degr ee vocational progr ams at nonprofi t col leges t o show t hat they are prepari ng
st udent s for gainful employment ,
Sever al people who heard t he speech sa id t hey viewed it as a mu ch more st r i dent critique of
for - prof it col l eges , and of hi gher educat i on acc r edi t at i on, t han Shi r eman has del i vered
bef or e. But David Dies, who heads t he Wi sconsin Educational Approval Board and j ust f i nished
a ter m as president of the nat i onal group of st at e regul at ors, didn ' t hear it quit e t hat way.
"I think Bob was expl aining why we need st at e regulati on and [Education] Department over si ght
to be par t of thi s t hree -legged st ool , not j ust accr editat ion, and why we all need t o wor k
toget her, " said Di es. "He was poi nting out some limi t ations of accreditation, but I didn' t
r eally see i t " as highl y cr i tical of accreditor s or f or-profit colleges .
- Doug Lederman<mai lto:doug. l ederman@i nsidehi gher ed, com>
Comment s on Comparing Hi gher Ed t o Wall St reet


Accr edi t ation agencies are set up to be corrupt
Post ed by St even D. Aird on Apr i l 29, 2010 at 7:45am EDT
. Shirema n is cor r ect about the accreditation agenci es . Even accr editation agenci es
for publ i c i nstit ut i ons are mi r ed in a gi gant i c conf l ict of i nt er est. They recei ve money from
t he school s t hey accredit . They ar e run by f or mer admi ni st rat ors of var i ous i nst itut ions .
They control access to feder al f unds ; however , they are anythi ng but t r ansparent, and they
are beyond t he r each of the Freedomof Inf ormati on Act . The f ederal government needs t o
change thi s immediat el y. Everyt hi ng t hat t hese agenc ies do or f ai l to do shoul d be
di scoverabl e.
• Shireman not immune to inher ent confl i ct s of i nt er est
• Posted by Glen S. McGhee, Dir . , at Flor i da Higher Education Accountabi lity Project on
April 29, 2010 at 8:45am EDT
. Shi r eman pi cks easy target s , but mi sses t he l oomi ng mel tdown caused by f urt her
aggravat i ng cr edent i al i nf lat i on .
52
The entire push f or accessi bilty will only succeed i n creating even worse credent ial
i nflation than what we now have.
No one -- not even Shi r eman -- has the courage and foresight to begin a discussion on rampant
credent ial ism and overschool i ng in the cont ext of what it t akes t o creat e conf l ict s of
int erest in accreditation and the institutional field itself, as well as cr edent i al market s.
Thi s i s the worst conf l i ct of interest. one which not even Shireman is i mmune t o.
My concer n i s not so much for the taxpayer, but f or those st udent s that lose out i n what
amount s to a ma ssi ve gamble t hat t he bubble won't burst bef or e t hey graduate .


Saf eguar di ng St i mul us vs . Judgi ng Qualit y
Posted by Trace Urdan • Resear ch Analyst at Signal Hi ll on April 29, 2010 at 8:45am EDT
. The conf lation of the need t o safegua r d St imul us dollar s with t he accrediting
agencies ' job of judging academic quali t y i s clever but ult imat el y just a r het or i cal devi ce
designed t o provide cover f or t he fac t t hat the administrat ion has no actual dat a t o suppor t
the need f or new "gainful employment .. regulations . So i nst ead of defending the r egul ations on
the basis of a identifiable problem regarding graduate empl oyment , now it turns out the rules
have been designed f or St i mul us prot ect ion.
If the new r ules are desi gned to protect Stimul us dollar s by tying those dol lar s t o outcomes ,
why is the f ocus on t he cost of the programs and not the quality of the empl oyment? And why
i s t he Pel l spendi ng at tradit ional schools not being safeguarded by the new measures . The
l ogi c of the rul es seems t o be t hat it hardl y mat t ers how effective a progr am i s i f it i s
pri ced low enough.
The fa ct i s t hat t her e i s already a r igor ous overs i ght r egi me f or prot ecting Pel I dollar s and
i t is no l ess effective based on the amount of dol l ars fl owi ng t hrough the system. Over sight
f or progr am i ntegrity - - ar e the st udent s ' eligi ble? and are t hey act i vel y enrol led in a
proper l y-accredit ed program? -- rests squarel y wi t h t he Department of Educat ion. not wit h the
accredi t i ng agenci es . Furthermore the Depart ment has enor mous aut hori ty t o come down hard on
any institution gui l ty of fraud or mal f easance and has shown no reluctance t o use that power
i n the past .
Congress has vest ed t he accredit i ng agenci es with the r esponsi bi l i t y not fo r judgi ng t he
integr ity of t he Ti tle I V progr am but f or ens ur i ng a suff i cient l evel of academi c quality.
The accr edi t i ng agenc i es may or may not be out - manned in t hi s t ask and they may or may not be
conf l i ct ed. But t hey are no l ess out- ma nned or conf l icted i n j udgi ng the quality and purpose
of traditional publi cl y- funded and not -for-profit col leges and uni versi t i es. In t erms of the
association wi t h r at ings agencies, t he compar i son is an unf ai r one . Ratings agenci es are f or-
prof it compani es wi th an int er est i n gr owth. Accredi ting agencies are sleepy not -f or - pr ofit
f irms whose f undament al work is accompl ished by academic professionals and col l ege presi dent s
who of t en are j ust as biased agai nst for -pr of it schools as Mr . Shi r eman seems to be.
Mr . Shireman i s a political l y- appointed l obbyi st and f ormer Congressional staf f er who managed
t o sl i p into a created pos i tion that has turned out t o be t he most important role in the
Obama admini stration relati ve t o post - secondary educat ion. without f aci ng Senat e
conf i r mat ion. But as br ight and well -int entioned as he may be, he is no more equi pped t o
judge academic eff ect iveness than I am. And i f he i s deci ded to second- guess the wor ki ng
academic prof essi onal s who actually provide the over si ght over academic institutions, at some
point he wi l l have t o answer to Congr ess.
* Tr ansparent , sear chabl e, account able
* Posted by Robert Al brecht , Pr of essor /Engl i sh and Humaniti es at Al f r ed St ate Col lege on
Ap ril 29, 2919 at 9:90am EDT
• Steven D. Aird is hal f r ight : all accreditation processes and r ecords f or all
inst itut i ons shoul d be transpar ent and searchable; the out come will be accountabilit y.
53
But t he charge that accredi t at i on agenci es are set up t o be corrupt i s mis leading,
inaccur ate, and finally, I believe, wit hout evidence. I cannot speak for al l r egional
commissions , but I do know that the Middle States Commission on Higher Educat ion is not only
far from corrupt , but that it f unct ions with great i ntegrity and careful al legiance to i ts
documents . Peer review, wh ile del i berat e and painstaking and t ime consuming, f inal l y involves
some three dozen inst itutions in most accreditat i on decisions -- comprehensive by any
standards. Fur t her, it s accreditat ion act ions are avai l able to the public t hrough i t s web
site .
Robert Shireman i s right to assert that accredi tat i on agencies see as one of their
obligations t o "help" i nstit utions in tr-oubke . And he i s r ight that the agencies are not
current ly f ul ly set up to f ulfill a more r i gor ous regul atory r ole. However, good r egulati ons
and peer eval uat ion should have "helping" as a common purpose. The demands of regional
accredi t or s for speci f ic evidence, data col lected over t i me, and attent ion t o planni ng and
assessment , on one hand, and the r equirements of wi se regulations from any gover nment body,
on t he ot her , need not conf lict . Cl ear l y r egional acc r edi t ors must l ook i nward - - qui ckl y --
to promote greater transparency and accountabi lity, and i ndeed thi s wi l l change t heir role
and r elation ship with member institutions . But "corrupt" ? Show us the data.
[ci d: i mage001 . png@91CAE770. DBCE0240] <ht t p: / / www. i nsi dehi gher ed. com/ l ayout / set / pr i nt / news/ 2010
/ 04/ 29/ shi r eman>
[cid : i mage002.gif@el CAE770. 0BCE0240]
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54
From:
Sent :
To:
Subject :
Stack, Kathryn B. [Kathryn_B._Stack@omb.eop.gov]
Wednesday, June 30, 2010 5:56 PM
Kvaal, James
RE: Agenda for RESCHEDULED: Follow-Up Meeting: Student Loan Meeting with OMS
Friday AM is fi ne if ED is t alking int ernally about how t o do t his. If an OMB prod would be hel pful, I could sent a note t o
t he group.
From: Kvaal, James [mailto:James.Kvaal@ed.gov]
Sent: Wednesday, June 30, 2010 4: 13 PM
To: Stack, Kathryn B.
Subj ect: RE: Agenda for RESCHEDULED: Foll ow-Up Meet i ng: St udent Loan Meet ing wit h OMB
We are meet ing t omorrow at 9 am, so either aft er 5 t oday or else Friday AM
From: Stack, Kathryn B. [ mailto: Kat hryn_B._Stack@omb.eop.gov]
Sent : Wednesday, June 30, 2010 3:44 PM
To: Kvaal, James
Subject: Re: Agenda for RESCHEDULED: f ollow-Up Meet ing: St udent Loan Meeti ng wit h OMB
Should we touch base on this before f riday morning, or just talk then about pushing this along?
Fr om: Stack, Kathryn B.
To: 'James.Kvaal@ed,gov' <James.Kvaalgaed.qov>
Sent: Thu Jun 2411 :17:15 2010
Subj ect : Re: Agenda for RESCHEDULED: Follow-Up Meet i ng: St udent Loan Meeti ng with OMS
Yes. Dan is great for this. Tom Weko will be an important contributor too 1assume.
From: Kvaal, James <James.Kvaalcped.qov>
To : Stack, Kathryn B.
Sent: Thu Jun 24 10:38: 16 2010
Subj ect: RE: Agenda for RESCHEDULED: Follow-Up Meeting : St udent Loan Meeting with OMB
We are likely to ask Dan to coordinate th is work when he ret urns t o his permanent role, with representati on f rom t he
five offices you suggest. Make sense?
From: Stack, Kathryn B,
Sent: Wednesday, June 23, 2010 7:13 PM
To: Walizer, Lauren; Graham, William; Skelly, Thomas; Martin, Carmel; Smit h, Zakiya; Campbell, Neil; Gordon, Robert M,;
Rowe, David; McNeece, Erin; Lee, Nicholas c.: Lyberg, Sarah A.; Taggart, Bill; Hurt, John; Arsenault, Leigh; francis,
Li shaun; Gebhard, Margaret M.; Weko, Tom; Kvaal, James; Shireman, Bob
Cc: Emanuel, Elizabet h N.
Subject: RE: Agenda for RESCHEDULED: Follow-Up Meeting: St udent Loan Meeting with OMB
Just wanted t o loop back wi th everyone about yeste rday's very const ruct ive meeting. I spoke briefly wit h Zakiya t oday
afte r a Hill meeti ng and t hi nk we have general agreement on t he foll owing:
1
(b)(5)
(b)(5)
From: Stack, Kat hryn B.
sent: Monday, June 21,2010 6: 16 PM
To: Walizer, Lauren; Graham, William; Skelly, Thomas; Martin, Carmel; Smit h, Zakiya; Campbell, Neil ; Gordon, Robert M.;
Rowe, David; McNeece, Erin; Lee, Nicholas C.; Lyberg, Sarah A.; Taggart, Bill; Hurt, John; Arsenault, Leigh; Francis,
Ushaun; Gebhard, Margaret M.
Cc: Emanuel, Elizabet h N.
s v btecn RE: A enda for RESCHEDULED: f ollow-U
From: Walizer, Lauren [ mailto:Lauren.Walizer@ed.gov]
sent: Monday, June 21, 20102:13 PM
To: Graham, William; Skelly, Thomas; Martin, Carmel; Smit h, Zakiya; Campbell, Nei l; Gordon, Robert M.; Rowe, David;
McNeece, Erin; Lee, Nicholas Co; Lyberg, Sarah A.; Stack, Kathryn B.; Taggart, Bill; Hurt, John; Arsenault, Leigh; Francis,
Lishaun; Gebhard, Margaret M.
Subject: Agenda for RESCHEDULED: Follow-Up Meeting: St udent Loan Meet ing with OMS
2
See attached the agenda f or t omorrow' s di scussion.
Meeti ng to continue di scussions between OMB and ED on the st udent loan model, costi ng met hodology and assumpt ions, and other
issues.
The meet ing will be held in the Dept of Educati on building, room 7C100.
If you are not able t o att end in person, please not ify t he organizer of the meeti ng (Lauren wali zer) and she will send call-in
informati on.
This is a reschedul ed meet ing that was originally to be held 6/17 at 2pm.
3
From:
Sent:
To:
Subject:
Stack, Kathryn B. [Kathryn_B._Stack@omb.eop.gov]
Thursday, June 24, 2010 11:17 AM
Kvaal, James
Re: Agenda for RESCHEDULED: Follow-Up Meeting: Student Loan Meeting with OMS
Yes. Dan is great for this. Tom Weko will be an important contributor too I assume.
From: Kvaal, James <James.Kvaal@ed.gov>
To: Stack, Kathryn B.
sent: Thu Jun 24 10:38: 16 2010
Subj ect: RE: Agenda for RESCHEDULED: Follow-Up Meet ing: St udent Loan Meeting wit h OMB
We are likely t o ask Dan to coordinate thi s work when he returns to hi s per manent role, wit h representation from the
five offices you suggest. Make sense?
From: Stack, Kat hryn B. [ mailto: Kat hryn_B._Stack@omb.eop.gov]
Sent : Wednesday, June 23, 2010 7: 13 PM
To: Walizer, Lauren; Graham, William; Skelly, Thomas; Martin, carmel; Smit h, Zakiya; Campbell, Neil ; Gordon, Robert M.;
Rowe, David; McNeece, Erin; Lee, Nichol as c.: Lyberg, Sarah A.; Taggart, Bill; Hurt, John; Arsenault, Leigh; Francis,
Ushaun; Gebhard, Margaret M.; Weko, Tom; Kvaal, James; Shireman, Bob
Cc: Emanuel, Elizabeth N.
Subject: RE: Agenda for RESCHEDULED: Follow-Up Meeti ng: Student Loan Meeting with OMB 1
(b)(5)
From: Stack, Kathryn B.
sent: Monday, June 21, 20106: 16 PM
To: Walizer, Lauren; Graham, William; Skelly, Thomas; Martin, Carmel; Smit h, Zakiya; campbell, Neil ; Gordon, Robert M.;
Rowe, David; McNeece, Erin; Lee, Nicholas c.; Lyberg, Sarah A.; Taggart, Bill; Hurt, John; Arsenault, Leigh; Francis,
lishaun; Gebhard, Margaret M.
Cc: Emanuel, Elizabeth N.
Subject: RE: Agenda for RESCHEDULED: Follow-Up Meeting: St udent Loan Meet ing wit h OMB
6
(b)(5)
"
From: Walizer, lauren [mailto:lauren.Walizer@ed.gov]
Sent: Monday, June 21, 2010 2:13 PM
To: Graham, William; Skelly, Thomas; Martin, Carmel; Smi t h, Zakiya; Campbell, Neil ; Gordon, Robert M.; Rowe, David;
McNeece, Erin; l ee, Nicholas c.: Lyberg, Sarah A.; Stack, Kathryn S.; Taggart, Bill; Hurt, John; Arsenault, Leigh; Francis,
Lishaun; Gebhard, Margaret M.
Subject: Agenda for RESCHEDULED: Follow-Up Meeting: Student Loan Meeting with OMS
See attached the agenda for t omorrow' s di scussion .
Meet ing t o cont inue discussions between OMBand EDon the student loan model, cost ing methodology and assumpt ions, and ot her
issues.
The meet ing will be held in the Dept of Educati on building, room 7(100.
If you are not abl e to attend in person, pl ease not ify the organizer of the meet ing (l auren Walizer) and she will send call -in
informat ion.
This is a rescheduled meet ing t hat was origi nally t o be held 6/ 17 at 2pm.
7
From:
Sent:
To:
Subject:
(b)(6)
From: Pauline Abernathy (mailto: pabernathy@ticas.orgl
Sent: Wednesday, June 16, 2010 6:28 PM
To: Kvaal, James
Subject: What's your phone number these days?
Pauline Abernathy
Vice President
The Institute for College Access & Success
www.ticas.org and
TICAS: 510.318.7900 Direct: 510.318.7903
10
From:
Sent:
To:
Subj ect:
Attachment s:
Mart in, Phil
Tuesday, June 01,20103:18 PM
Shireman, Bob
FW: Today's Call
HEFTS_2P9_060110.pdf
FYI - talki ng t o morgan Stanley t oday t o learn more, they sent across these bullets with their own proposal. (includes
f inanci ng DLthrough different mechani sm, treasury doesn' t support/l ike the idea, just wanted to make sure you had it.]
Will let you know if we learn anyt hing good on the call.
-
F rom: Brown,
Sent: Tuesday, June 01';'2010 2:57 PM
To: Martin, Phil; aaron. klein@do.t reas,gov; John.Bellows@do.treas.gov
Cc: Graham, William; Wilson, James
Subj ect: RE: Today's call
Gentlemen-
Please see the attached t -paqe summary of the strategy t hat we would like to discuss on today's call.
Michael Brown, Managi ng Director
Morgan Stanley I Global Capital Markets
1585 Broadway I Floor 04
New York, NY 10038
Phone: +1 212 761· 2110
Fax' +1 212 507. 5086
l(b)(6)
From: Martin, Phil [mailto:PhiI.Martin@ed.gov]
sent: Tuesday, June 01, 2010 10:04 AM
To: Brown, Michael (GCM); aaron.klein@do,treas.gov; John.Bell ows@do.treas.gov
Cc: Chavers, Kevin (FlO); Graham, William; Wilson, James
Subject: RE: Today' s Call
Loopi ng Will iam Graham and James Wi lson who will be on t he call for ED.
From: Brown, Michael _
Sent: Tuesday, June 01, 2010 10:01 AM
To: Martin, Phil; aaron.klein@do.t reas.gov; John.BeHows@do.treas.gov
Cc: Chavers, Kevi n
Subj ect: Todav's call
Gentlemen-
I just wanted to check in to see if you have specific questions or topics that you would like covered on today's call.
Best-
Mi chael Brown, Managi ng Di rector
Morgan Stanley I Global Capital Markets
1585 Broadway I Floor 04
19
New YOfk. NY 10036
Phone: +1 212 761-2110
Fax' +1 2' 2 507_5086
l(b)(6) rOfQanstanlev.com
NOTI CE: If received in error. please destroy. and octlfy sender. Sender sees oct inleod 10 waive confidential., or prMIege. Use of this email is prohibi ted....nen
received i1 error. We may morulor and store emalls to the extent permuted by
NOTICE: "received in error. please destroy. and octlfy sender. Sender eoes oct inleod 10 waive confodenliahty or privilege. Use of this email is prohibite<l..nen
received i1 error. We may monitor and slore 10 the ed en! permitted by applicable
20
(b)(5)
(b)(5)
From:
Sent :
To:
Subj ect:
(b)(5)
From: Shireman, Bob
Sent : Friday, May 21, 2010 11:00 AM
To: Tobin, Katherine
Subiect: RE: REMINDER: Bam Senior Staff Meetin Tomorrow -- Materials for those on the phone
(b)(5)
From: Tobin, Katherine
Sent: Friday, May 21, 2010 10:35 AM
To: Shireman, Bob
Subject: RE: REMI NDER: Bam Senior Staff Meeting Tomorrow -- Materials for those on the phone
Fascinating meeting....thanks for the inf ormat ion below. I was on t he t elephone and thi s helped me follow.
Thanks, Bob!
Katherine
From: Shireman, Bob
Sent: Friday, May 21, 2010 7:53 AM
To: Haro, Adrian; Myers, Sam; Yal e, Matt; Cunningham, Peter; Miller, Tony; Whalen, Ann; Martin, Carmel; Smith,
Marshall ; Snyder, Jason; Shelton, Jim; Ali, Russlynn; Anderson, Jo; Darnieder, Greg; Groff, Peter; Jupp, Brad; Waldo,
Eric; Muenzer, Melanie; Weiss, Joanne; Rose, Charlie; Cummings, Glenn; Sepulveda, Juan; Jennings, Kevin; Gomez,
Gabriella; Wilson, John; l ee, Andrew; Immerman, Suzanne; Jones, Jacqueli ne; Easton, John; Vadehra, Emma; Horwich,
lloyd; Duran, Maribel; Borders, Tie: Arsenault, l eigh; Sprow, Stephanie; Melendez, Thelma; Waller, Jen; Barrett, Tarik;
Secretary's Conference Room (OS Managed); Dann-Messier, Brenda; Kanter, Martha; Hamilton, Justin; Abrevaya, Sandra;
Tobin, Katherine; Posny, Alexa; Shelton, Betsy; Bissonnette, Michelle; Cator, Karen; Lai tinen, Amy; Dunbar, Adrienne;
Uvin, Johan; Ahuja, Kiran; Wurtzel, Judy; Andersen, Susie; Chong, Frank; Lamb, Michael ; Spellman, Rene; Harris, Carl;
Aylward, Rayna; l agdameo, Christina; Solomon, Cathy
Subject: RE: REMINDER: 8am Senior Staff Meeting Tomorrow -- Material s for those on the phone
21
(b)(5)
(b)(5)
---
From: Hare, Adrian
Sent: Thursday, May 20, 2010 5:32 PM
To: Myers, Sam; Yale, Matt; Cunningham, Peter; Miller, Tony; Whalen, Ann; Marti n, Carmel; Shireman, Bob; Smith,
Marshall ; Snyder, Jason; Shelton, Jim; Ali, Russlynn; Anderson, Jo: Darnieder, Greg; Groff, Peter; Jupp, Brad; Waldo,
Eric; Muenzer, Melanie; Weiss, Joanne; Rose, Charlie; Cummings, Glenn; sepulveda, Juan; Jennings, Kevin; Gomez,
Gabriella; Wi lson, John; Lee, Andrew; I mmerman, Suzanne; Jones, Jacqueline; Easton, John; Vadehra, Emma; Horwich,
Lloyd; Duran, Maribel; Borders, Tia; Arsenault , Leigh; Sprow, Stephanie; Melendez, Thelma; Waller, Jen; Barrett, Tarik;
Secretary' s Conference Room (OS Managed); Dann-Messier, Brenda; Kanter, Martha; Hamilton, Justi n; Abrevaya, Sandra;
23
Tobin, Katherine; Posny, Alexa; Shelton, Betsy; Bissonnette, Michelle; Catoe, Karen; lait inen, Amy; Dunbar, Adrienne;
Uvln, Johan; Ahuja, Kiran; Wurtzel, Judy; Andersen, Susie; Chong, Frank; lamb, Michael; Spellman, Rene; Harris, Carl;
Aylward, Rayna; lagdameo, Christina; Solomon, Cathy
Subject: REMI NDER: Sam Senior Staff Meeting Tomorrow
Dear all :
A qui ck remi nder about tomorrow s 8am Senior Staff Meeting. Bob Shi reman will give a presentation on program
integrity. Dial -In information is li st ed below. Thanks.
Dial-In Informat ion:
Number: 877-937-6173
Partici pant Code: 7243925#
Best,
Adri an
24
From:
Sent :
To:
Cc:
Subj ect:
l(b)(6) b
David Hawkins nacacnet.org]
Monday, May 17, 2010 4:05 PM
Pauline Abernathy; Margaret Reiter; Amanda Modar; Angela Peoples; Barmak Nassirian;
chris.lindstrom@pirg.org; Connie Myers; Deanne Loonin; Debbie Frankie Cochrane; James
Simpson; jstudl ey@publ icadvocates.org; Lauren Asher; Liz Baldwin; Luke Klipp; Margaret
Reiter; Steve Burd; Susan Lehr; Edie Irons
Michelle Rodriguez; Luke Klipp; Laura Szabo-Kubitz; Dannenberg, Michael ; Shireman, Bob
Chronicle letter
The Chronicle published a letter I submitted in response to an article they published on state authorization a few weeks
back.
httD:l l chronicle.com/article/Debate-Over-Proposed-Rule/655621
David Hawkins
Director of Public Policy and Research
National Associat ion for College Admission Counseli ng
1050 North Highland Street, Suite 400
Arlington, VA 22201
Ph. (703) 836-2222 xl09
Fax (703)373-2369
NACAC on the Web: WW'N.nacacnel.org
28
From:
Sent:
To:
Subject:
I'll be on t he phone .
Shireman, Bob
Friday, May 14, 20104:32 PM
McFadden, Elizabeth
Re: Gainful Calendar
(b)(6)
- - - - - Origi nal Message --- - -
Fr om: Mc Fadden, Elizabet h
To: Shireman, Bob
Sent : Fri May 14 15: 27:13 2010
Subject: RE: Gainful Calendar
I will bri ng them to t he 5:00 meeti ng.
Georgia was referri ng to t he one-page s ummar y you di d.
-- - - -Origi nal Me ssage- ----
From: Shirema n, Bob
Sent : Friday, May 14, 2010 4:20 PM
To : McFadden, Eli zabeth
Subject : Re : Gainf ul Calendar
Elizabet h, please shar e t he EDMC metrics when you have a chance.
When Georgia referred to my calendar, did she mean the one- page s ummar y I di d?
-- - - - Original Message ---- -
From: Yuan, Georgia
To: Mi l ler, Tony; Shi r eman, Bob; Bergeron, Davi d; McFadden, Elizabet h; Finley, St eve;
Madzelan, Da n
Sent: Fri May 14 14:01:48 2010
Sub; ect: Ga i nf ul Calendar
(b)(5)
'Geor gi a
29
From:
Sent:
To:
Cc:
Subject:
Glickman, Jane
Friday, May07,2010 8:27 AM
Manheimer, Ann; Arsenault. l eigh
Babyak, Stephanie
FW: BobShireman remarks
Ann or l eigh- - Hechinger Institute person i s as ki ng ( see below)
can you confirmt hat we ar e aimi ng fo r a Nov. 1 Fi nal Rule and ca n we say the NPRM i s
expected, therefore, some t i me t hi s summer?
Thanks - - Jane and Steph
-----Origi nal Mes sage- - je
b
)(6)
From: Wi llen, Eli zabeth ,,"',,'"";<"0., - - - - - ----- - - - - - -
Sent: Thursday, May 06, 2010 5:45 PM
To : Babyak, St ephani e
Cc : Glickman, Jane
Subj ect : RE: Bob Shi reman remarks
Woul d it be possi bl e t o get an on t he r ecord comme nt from any of you or from Bob about WHEN
the new rules and regul ations f or f or-profit schools are expected to be r el eased?
liz Wi llen
Associate Di rector
Hechi nger Institute on Educati on and t he Medi a
Teachers Col lege, Columbia Uni versity
Phone: 212-870-1086
Fax : 212-870-1074
l(b)(6)
' Promoting f ai r , accurate and insight ful r eporti ng on educat ion si nce 1996'
Fr om: Babyak, Stephanie Imailto:Stephani e . Babyak@ed.govl
Sent: Wednes day, May 05, 2010 4:07 PM
To: Will en. Elizabet h
Cc : Gli ckman. Jane
Subj ect : Bob Shi r eman r emar ks
Ms . Willen.
t r anscript .
Bob Shi r eman spoke from notes, not a prepared t ext, and we do not have a
Sorry .
35
36
From:
Sent :
To:
Subject:
(b)( S)
Robert Shi reman
Deputy Undersecretary
U.S. Depart ment of Education
(202) 260-0 10 1
Shireman, Bob
Thursday, May 06, 2010 8:46 PM
Miller, Elise
RE: Quick question for you
Fr om: Miller, El ise
Sent: Thursday, May 06, 2010 7:24 PM
To: Shireman, Bob
Subj ect: QUick quest ion for you
If you are available for a quick question, can you give me a call on my wor/( #: 202-502-73187 " Ube here pretty lat e. Thanks!
Otherwise, I' ll t ouch base wi th you in the morning. t'
Eli se Mil ler
Program Di rector
Post secon dary I nst itutional Stud ies Program
National Center f or Educat ion St at ist ics
1990 K St reet, NW
Room 8113A
Washi ngton, DC 20006
Elise. Mi Iler@ed .gov
( 202) 502-7318
( 202) 219-7079 (Fax)
38
39
From:
Sent:
To:
Subj ect :
Attachments:
Leigh -
Mayes. Edgar
Wednesday, May 05,20105:05 PM
Arsenault. Leigh
FW; Request to direct inquire to Program other than OIG and FSL
Leiter to Secretary Duncan 05-04-10.pdf
I actuall y just spoke with him and he sent the following e-mai l in reference to the attached.
Thanks,
Edgar
From: Manuel P.
Sent: Wednesday, May 05, 201 :
To: Mayes, Edgar
Subject: Request to direct inquire to Program other t han OIG and FSL
Our concerns are potential conf licts and/ or deficiencies in t he fact discovery and application of law by the OIG, and t he
OIG's discreti on in conducting audit reviews and converting these into investigat ions, and i n making decisions on
referrals to t he DOJ, and how these adversely affect t hose individual charged wit h providing offici als i n t he Federal
St udent l oan wit h informati on to use in negot iati ons wit h large, sophist icated, and well fu nded, public companies wit h
aggressive legal and lobbying representati on.
The very poor results that t hese legacy defici encies and confli cts generat e are visible in the pri or administ rat ion' s
enforcement record.
It is not possible t o receive fair comment f rom t he OIG and FSl, and we respectfully request t he vi ew and comments of
t he Sectv or Undersecty.
Thank you.
From: Lorena Uivfchuzca
Sent: Wednesday, May OS, 2010 4:02 PM
To: Manuel P. Asensio-Garcia
Subject: FW: Letter to Secretary Duncan from the Alliance for Economic Stabil ity, I nc.
From: Mayes, Edgar [mailto;EdQar.Maves@ed.gov] On Behalf Of Duncan, Arne
Sent: Wednesday, May OS, 2010 8: 34 AM
To: Lorena Uivichuzca
Subject: RE: Letter to Secretary Duncan from the Alliance for Economic Stability, I nc.
Dear Ms. L1i vi chuzca:
40
Thank you for forwarding Mr. Rodri guez' s letter to Secretary of Education Arne Duncan. We appreciate
hearing from you.
His letter has been forwarded to the appropriate stafT membcr for revi ew.
Thank you agai n for contacting us.
Sincerely,
Edgar Mayes
Director of Correspondence and
Communications Control Unit
Offi ce of the Secretary
U.S. Department of Education
Washington, DC 20202
Fro-;;-l orena
Sent: Tuesday, May 04, 2010 4:07 PM
To: Duncan, Arne
Cc: oeter.cunniingham@ed.gov: Bergeron, David; Sorensen, Howard; Aspling, David; Tighe, Kathleen S.; Shireman, Bob
Subject: letter to Secretary Duncan from t he Alliance for Economic Stability, I nc.
Dear Secretary Duncan,
Please find attached a letter f rom the Alliance for Economic Stability, Inc. regardi ng Bridgepoint Education, Inc.
lorena M. lIivichuzca
747 Third Avenue, 25th Floor
New Yor k, NY 10017
Tel. (212) 702-8805
Fax (2 ·3465
Email: (b)(6) mil1rockllc.com
ThiSmessage is lor the intended recipi ent' s use only. It is not to be retransmitted without the express witten consent of the sender. This e-mail may
contain confidential. propnetary Of' legalty privileged Inl onnatioo. II you receive this message in error , please immediately delete it and notify the sender .
You must rot. directly or indirectly, use, disclose. distribute. print. Of copy any part of thi s message il you are not the inleocled recipient.
Copies of 'Mitten communcancos (ioduding may be kept and archived indefinitely. This may iodude this e-mail. and any e-mail reply made to it
41
Alliance For Economic Stability, Inc.
747 Third Avenue, 25
th
Floor
New York, New York 10017
May 4, 2010
Arne Duncan. Secretary
U.S. Department of Education
LBJ Education Building
400 Maryl and Avenue, SW
Room II 7W311
Washington, DC 20202
Dear Secretary Duncan:
We believe that Bridgepoi nt Education. Inc. is operating counter to the intent and expl icit provisions of
current U.S. Jaw covering post-secondary educational institutions receiving funds as pan of Title IV of
the Higher Education Act of I % 5, as reauthorized (the " I lEA' ).
As you may be aware, Bridgepoint owns Ashford University and the University of tbe Rockies. though it
is Bridgepoint ' s administration of Ashford University that is of particular concern. In 2004, Bridgepoi nt
was started by a Wall Street private equity fund in partnership with former executives from Apollo
Group. Inc. In 2005, Bndgepomt acquired the Franciscan University ofthe Prairies, a religious-afftl iat ed
institution with approximately 300 students, with revenues estimated to be less than SIO million.
Bridgepoint renamed the inst itution Ashford University, and drove enrollment through Ashford' s online
program to a reported 65,788 students as of March 31, 2010. with revenues ofS526 million in the last
twelve mont hs.
This growth has come not from educati onal performance but from an incenrivized sales force of over
1,400 salespersons equal to one for every 44 students, and growing. Astoni shi ngly, the vast maj ority of
this sales personnel growth occurred whil e the Office of Inspector General (" DIG") of the Department of
Educat ion (" DOE' '} was supposedly working to remediate Bridgepoint' s use of taxpayers' funds to pay
sales personnel in violation of DOE regulations.
See Table I, which shows the growth in Bridgepoi nt 's student enrollment, and Table 2, which shows the
growth in Bridgepoinr ' s revenues.
Our foremost concern about Bridgepoint is that the company is directl y violating DOE regulati ons
surrounding " Safe Harbors" for incentive compensation payments to employees . Bridgepoint employees
who enroll stude nts are compensated sol ely and exclus ively for their sales work.
Bridgepoint ' s business reli cs upon paying its massive sales force for enrolling individuals ....he have little
to no ability to evaluate their alternat ives or the cost and benefit of a Bridgepoi nt education.
Bridgepoint sets its tuition fees to be significantly lowcr than other large, publicly-traded companies
operating for-profit online universities. The tuition fees of Argos)' Univers ity, the Uni versity of Phoenix,
Secretary Duncan
May 4, 2010
Page 2 of2
and DeVry University are 37% to 55% higher than those of Bridgcpoint' s Ashford University. See Table
3.
Even with signifi cantly lower tuition fees, Bridgepoint consistently spends more tuition revenue on
marketing than on actual instruction. See Table 2. Bridgepoint spent more than $44 million on marketing
and promotions in the quarter ended March 3 1. 2010. This was nearly triple the amount that Bridgepoint
spent for the same period of 2008. This increase was during the time of the compliance audit of Ashford
University conducted by OIG.
Bridgepoint also devotes a far lower portion of its tuition revenue to providing instruction than similar
companies. See Table 3. Bridgepoint devotes a far, fur lower portion of tuition fees to instructi on than
more traditional and reputable not-for-profit educational institutions.
Whil e other companies operating for-profit, online universities have been able to obtain deferential
treatment from the DOE, we believe that Bridgepoint ' s abuse of regulations surrounding Title IV fu nding
and of the intent of the HEA is far more egregious than even any of its for-profit counterparts.
Bridgepoint evidences aggressive enroll ment tactics, illegal incentive compensation, and an incredibly
low port ion of tuition devoted to instruction. Even in an industry built on abuses of a government
program, Bridgepoun's irregularities stand out.
The DOE has the authority not only to pursue typical sanctions, but to conduct a more broad-based review
of abuse by Bridgepoim of DOE regulations and of the intcnt of the HEA and to issue sanctions more
much more severe than the sanctions the DOE has typically imposed upon for-profit, onl ine education
providers. The DOE' s past sanctions offor-profit education providers have failed to rcmediate hann and
have had the contrary effect of providing incentive to engage in the abuses discussed above.
On a personal note, for over a decade, I have been an adjunct professor of busi ness at various community
and four-year colleges, and I know fi rsthand the effects that a lack of financial aid has on students' ability
to obtain a college degree within a reasonable amount of time. Many students find themselves working
full-time or part-ti me jobs j ust to fund a portion of their higher education. Tbe enrichment of these
private enterprises at the expense of American students who arc this country's future is deplorable.
cc: Peter Cunningham, Assistant Secretary
Office of Communications and Outreach
Kathleen S. Tighe, Inspector General
. Off lc c of the Inspector General
David Bergeron, Director of Poli cy,
Planning and Innovation
Office of Postsecondary Education
Enclosures
Robert Shireman. Deputy Undersecretary
Office of the Under Secretary
David J. Aspli ng, Assistant Special Agent in Charge
Office of the Inspector General
Howard Sorensen, General Counsel
Office of Inspector General
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Brldgep olnt Educat Ion, Inc. I BPI)
Table 3
Tui ti on Fees Per Undergraduate Credi t Hour for BPrs Ashford University and Comparables
University Uickerl
Ashford University (BPI)
DeVry Universrty {DV)
University of P h o e n i ~ (APOl)
American InlerConti nenlal University {CECD)
Strayer University (STRAt
Argosy Uni versity (EDMC)
Average Tuition
Tuition Fee
372
575
530
390
353
5"
455
% above (below) Ashford
55%
42%
5%
-5%
37%
22%
1: The American InterContinental Universily tuition fee listed is for non-degree students laking undergraduate level classes.
2: Strayer charges $1 .590 per course for undergraduate part-time students: all courses are 4.5 credit hours.
• CPLA and APEI are not included. as Capella has a complicated fee structure, varying by undergraduate course level. and APEI caters more to the military community than Title IV
recipients.
Prepared 4119110
From:
Sent:
To:
Subject:
Attachments :
Shireman, Bob
Tuesday, May 04, 2010 4:05 PM
Cunningham, Peter; Hamilton, Justin
FW: THE SUB-PRIMING OF STUDENTS: WHAT YOU NEED TO KNOW BEFORE
ENROLLING
Sub-priming for studente-e financial crisis in educati on.doc
Fro;;;Lehr, Susan M.I(b)(6) ~ f s c j . e d 1
sent: Tuesday, May 04, 2010 3:30 PM
To: Sellers, Fred
Subject: FW: -mE SUB·PRIMINGOF STUDENTS: WHAT YOU NEED TO KNOW BEFORE ENROLUNG
Thought you might like to see what we have done!
Susan
From: Corby, Michael E.
sent: Tuesday, May 04,2010 3:10 PM
Subject: -mE SUB-PRIMING OF STUDENTS: WHAT YOU NEED TO KNOW BEFORE ENROLUNG
Media Advisory
Marketing and Communications
MEIlIA ADVISORY
Media contact:
1\.1 ichael Corby
904-632-3310
May 4, 2010
TI l E SUB-PRIMING OF STUDENTS: WHAT YOU NEED TO KNOW BEFORE ENROLLI NG
"College. Inc.•" FRONTLINE May 4 broadcast sheds light on/or-profit educational instinaions
There' s trouble at the intersection of Wall Street and College Avenue of Dreams. Two Florida State
College at j acksonville administ rators want 10 help students-eny studcnts-c-steer clear of a serious fi nanci al
cri sis in education.
In a May 4 airing of Frontline, Public Broadcasting System affiliates, including WJCT in Jacksonville
(Comcast ch. 8 and ch. 440 at 9 p.m.), will explore "College, Inc.," a report on government funding offor-profi t
colleges and universities. From the PBS Frontl ine press release:
"Higher education is a $400 billi on industry fueled by taxpayer money. One of the fastest-growing--and
most controversial-csectors of the industry is the for-profit colleges and universities. Unlike traditional colleges
that raise money from wealthy alumni and other donors. many for-profi t schools sell shares to invest ors on Wall
Street. But what are students gelling out of the deal? Critics say a worthless degree and a mountain of debt ... "
Data released by the Department of Education seems to support that stance. As reported in the May 3
Chronicle of lligher Education, the default rate was higher for borrowers who attended for-profi t schools {at
45
LI NKS:
11.9 percent) than for borrowers who attended publ ic coll eges (at 6.2 percent) or private colleges (at 4.1
percent).
The two Florida State College administrators. Vice President for Government Relations Susan Lehr and
Associate Vice President for Workforce Development Jim Simpson, have followed the money rigorously and
add their perspectives. with some startling facts about the path that money takes. Their interest stems from their
College' s involvement as a state leader in workforce development. The reality is that many oft he fantast ic jobs
and salaries promised by the for-profit schools never materialize, and as Lehr explai ns:
"The way it works is this: The student is recruited. The student comes. they sign them up for loans. the
tuition is paid. the school gets its money. the st udent gets the debt. and when the student defaults. the taxpayer
has to pay that."
In a comparison of the origins of Jacksonville student loan defaults. the facts are alarming. According
to Simpson' s calculations. for-profit schools account for 8.7 percent of post-secondary enrollments in
Jacksonville. Yet they account for 48.4 percent-nearly half-of student loan defaults. More than one in seven
of their students, or 14.4 percent of their enrollment, end up in default on their loans. Compare that wit h 1.24
percent of the total enrollment of students in public institutions who default on their loans.
For Lehr and her College, it' s not about competition for students. Enrollment increased 35% over the
past three years at Florida State College at Jacksonville.
There are other concerns tied in with thi s very complicated issue, but it' s primari ly an issue of
consumer awareness.
"The student needs to understand what it is they' re seeking.... said Lehr. "What kind of training, docs mat
trai ning have specifi ed types of accreditation? The other thing they need to look at is cost. ... is it an amount
they can afford? If something isn't affordable. it's not very good access:'
Lehr and her colleague Jim Simpson have spent weeks listening and talking to legislators in Tall ahassee
and on Capitol Hill. They have amassed facts and details about costs; accreditation issues that affect students'
abi lity to transfer credit s to another school or degree program; job placement and employment opportunit ies;
and defaults on student loans. What ' s their purpose?
"Our concern is that students are being inappropriately enticed into believing that they're going to get
something that they may or may not get. and it's costing them a fort une." Lehr explained. "When that
happens. the students oft en end up on our doorstep, and a lot of t imes we can't help them. They've maxed out
on federal financial loans and they have no more capaci ty for loans. It happens quite often."
l\I EDIA OPPORTUNITY: Susa n Lehr and Jim Simpson are available for interviews. CGs are
attached from DVD of int erviews with Lchr and Simpson and copies of the DVIl are available 10 media
as well. A cur r ent st udent who discovered too late that credits from her former college would not t r ansfer
to a state school, is also wtlllng to talk to medi a, upon request.
-30-
FlOrida State College at Jacksonville isaccredited by the Commission on Coll eges 01the Southern Association of Colleges and Schools 10
award the baccalaureate degree aod the associate degree. Contact the CommiSSion on Colleges at 1866 Southern lane. Decatur, Georgia
30033-4097; or call 404-679-4501 for coestcos about the accreditation of Flofida State College at JacksonviMe.
4'
Chronicl e of Higher Education: http:Uchronicie.com/ art icte/ Oefault· Rates-for-Student/ 65387/
Front line: htt p:Uwww.pbs.org/wgbh/pages/ front line/ col legeincl
47
H f a c e s on vut e
MEDIA ADVISORY
Media contact:
Michael Corby
904-632-3310 desk; 904-608-0415 cell
Media Advisory
Marketing and Communications
May 4, 2010
TIlE SUR-PRIMING OF STUDENTS: WHAT YOU NEED TO KNOW IIEFORE
ENROLLING
"College. Inc.. " FRONTLINE broadcast sheds light on/or-profit educational institutions
There' s trouble at the intersection of Wall Street and College Avenue of Dreams. Two
Florida State College at Jacksonville administrators want to help students-carry students-steer
clear of a serious financial crisis in education.
In a May 4 airi ng of Frontline. Public Broadcasting System affiliates, including WJCf
in Jacksonville (Ccmcast ch. 8 and ch. 440 at 9 p.m.), will explore "College, lnc.," a report on
government fundi ng of for-profit colleges and universities. From the PBS Frontline press
release:
"Higher education is a $400 billion industry fueled by taxpayer money. One of the
fastest-growing-end most controversial- sectors of the industry is the for-profit colleges and
universities. Unlike traditional colleges that raise money from wealthy alumni and other
donors, many for-profi t schools sell shares to investors on Wall Street. But what arc student s
getting out of the deal? Cri tics say a worthless degree and a mountai n of debt .. ."
Data released by the Department of Education seems to support that stance. As
report ed in the May 3 Chronicle of 11igher Education, the default rate was highcr for borrowers
who attended for-profit schools (at 11 .9 percent) than for borrowers who att ended public
coll eges (at 6.2 percent ) or private colleges (at 4.1 percent).
The two Flori da State College admi nistrators, Vice President for Government Relations
Susa n Lehr and Associate Viee President for Workforce Development Jim Simpson, have
followed the money ri gorously and add thei r perspectives, with some startling facts about the
path that money takes. Their interest stems from their Coll ege' s involvement as a state leader
in workforce development. The real ity is that many of the fantastic jobs and salaries promised
by the for-profi t schools never materi al ize, and as Lehr explains:
"The way it works is this: The student is recruited. The student comes, they sign them
up for loans, the tuition is paid, the school gets its money, the student gets the debt, and when
the student defaults, the taxpayer has to pay that."
In a comparison ofthe origins of Jacksonville student loan defaults, the facts are
alarming. According to Simpson' s calculations, for-profit schools account for 8.7 percent of
post-secondary enrollments in Jacksonville. Yet they account for 48.4 percent- nearly hal f--af
student loan defaults. More than one in seven of their students, or 14.4 percent of their
enrollment, end up in default on their loans. Compare that with 1.24 percent of the total
enrollment of students in public institutions who default on their loans.
For Lehr and her College, it' s not about competi tion for students. Enrollment increased
35% over the past three years at Florida State College at Jacksonville.
There are other concerns tied in with this very complicated issue, but it' s primarily an
issue of consumer awareness.
"The st udent needs to understand what it is they' re seeking," said Lehr. "What kind of
training, does that training have specified types of accreditation? The other thing they need to
look at is cost. ,., is it an amount they can afford? If something isn't affordable, it's not very
good access."
Lehr and her colleague Jim Simpson have spent weeks listening and talking to
legislators in Tallahassee and on Capitol Hill. They have amassed fact s and detai ls about costs;
accreditation issues that affect students' ability to transfer credits to another school or degree
program; job placement and employment opportunities; and defaults on student loans. What' s
their purpose?
"Our eoncern is that students are being inappropriately enticed into believing that
they're going to get something that they mayor may not get, and it's costing them a fortune,"
Lehr explained..... When that happens, the students often end up on our doorstep, and a 101 of
times we can't help them. They' ve maxed out on federal financial loans and they have no
more capacity for loans. It happens quite often."
!\l EOlA OPPORTUNITY: Susan Lehr and Jim Simpson are available for
int erviews. CGs arc attached from DVD of interviews with Lehr and Simpson and copies
of the DVD are available 10 media as well. A current student who di scovered too late that
credits from her former college would nollransfer 10 a state school, is also willing 10 talk
to media, upon r equest.
-30-
Florida State College at Jad<.sonvine is accredited by the Commission on Colleges of the Sou\tlem Assodation of Colleges
and SChools to award the baccalaureate degree and the associate degree. Contact the Commission on Colleges a11866
Sou\tlem l ane. Decatur, Georgia 30033-4097; or catI 404-679- 45Q1 lor cuesuoos about the accredaancn 01AoriCa State
Coll ege at Jacksonville.
LINKS:
Chronicle of Higher Education: http:Uchronicle.com/article/Defaul t-Rates-for-Student/65387/
Frontli ne: http://www.pbs.org/ wgbh/pagesLl ro"! I!nelcolIege!nct
eGs:
• Susan LehrN P. Government Relations/Florida State College
• Jim SimpsonfAVP, Workforce DevelopmenUFlorida State College
Susan Lehr' s log sheet:
"Hello. I am Susan Lehr, Vice President for Government Relations for Florida State College at
Jacksonville.-
"The US Department of Education is writing a new set of rules that govern the higher education
act which governs all of the inst itutions of higher education in the nat ion. The focus of these
particular rules relates to federal financial aid and the amount of money that students may
borrow to go to college. While this affects all institutions, it really has the most dramatic effect on
the for-profit industry because the regul ations don't touch degree programs in public institutions
and not-for-profit institutions."
"Congress fi rst authorized for-profit institutions to have access to federal financial aid, under the
condition that they prepared students for gainful employment. That's in the law for the for-profit
institutions and for institutions that do training for less than a degree. For example, Florida State
College at Jacksonville has a lot of vocational programs that are non-degree programs. All of
those programs are impacted by this negotiated rule that the Department of Education is j ust
about to put out."
'There was no definition for gainful employment. There really never has been. So, there' s a
tremendous difference between the public sector - at least in Florida - and the for-profit sector.
The public sector in Florida has third-party verification of employment. The for-profit sector is
welcome to participate, but choose not to. A very small percentage of for-profit schools
participate in third-part y verification of employment and how much the person earns."
' The for-profit industry is self-reported. So they report whether or not a person goes to work,
they report how much a person earns; whereas in Florida, in the public sector, the state verifies
how much a person is earning and indeed whether or not they're working at all. "
"How we got interested in it is... a number of students came to our insti tution that have already
graduated or completed credits or certifi cates from some of these for-profit schools but they
don't have a j ob and they have a lot of debt. They come to our college hoping they can either
transfer those credits into our programs or get a credential that will allow them to get a good-
paying job."
"One of the differences between our institutions and the for-profit institutions has to do with
remediation. As you know, I think it's approaching 70 percent of the students that go to post-
secondary school have to have remediation. Well, there's a reason that they need remediation
in order to do upper level work. Most of the for-profit s don't offer remediation. Frankly, a lot of
the students, they buy the quick- and-easy. Quality education isn' t quick-and-easy. It requires
some preparation and work on the students' behalf. A lot of times, students are looking for the
short cuts , and it costs them a lot of money."
"When the debt becomes so big and the student can't earn enough to make the payment s, it
goes into default. The student cannot discharge, except in very rare circumstances, they cannot
discharge that debt through bankruptcy. It will follow them their entire lives. They cannot go
back to school until those debts are paid so it really stops their educat ion and it straps them
financially. A lot of times they can't afford to buy a car. Very often the payment s on these loans
are the size of a mortgage so they can't buy a house or really participat e in the economic
recovery of the nation:
"It's very much like sub-prime mortgages, where the pitch was, 'Oh you deserve this wonderful
home. Don't worry about your salary, I am sure you're going to make more money in the future;
we're going to get you into this mortgage reall y inexpensively, and.. . Sign here.' People buy that
American dream of owni ng their own home. That's exactly what's happening; in fact it's called
the sub-priming of students. What happens is the for-profit companies, corporations and schools
recruit these students, they sell the dream. 'Come here, we're going to help you get a great
career, you're goi ng to earn lots of money, don't worry about the size of this loan because you're
going to make this money in no time in your new career.'
"We have a tremendous increase in students at Florida State College at Jacksonville. We really
don't need to go out and recruit more students. Our concern is that students are being
inappropriately enticed into believing that they're going to get something that they may or may
not get, and it's costing them a fortune. When that happens, the students often end up on our
doorstep, and a lot of times we can't help them. They've maxed out on federal financial loans
and they have no more capacity for loans. It happens quite often."
-It's called OPPAGA, Office of Policy, Planning and Government Accountability, OPPAGA, did a
study between the for-profit institutions that do vocational traini ng and the public institutions, and
they identified programs that were offered in both types of institutions, and what they found was
that the public institutions have a much higher probability of being accredited in the different
disciplines. Even when you count the state subsidy that the legislature provides to public
institutions, even when you add that plus the students' tuition, it is still costing the state less
money - certainly less for the student."
"The student needs to understand what it is they're seeking, what kind of training, does that
training have specified types of accreditation? The other thing they need to look at is cost. The
amount of money it's costing them to go to whatever school they choose to go to, is it an
amount they can afford? Access and affordability go hand in hand. If something isn't affordable,
it's not very good access:
Jim Simpson log sheet:
"Hello. I am Jim Simpson, Associate Vice President, Florida State College at Jacksonville."
"Susan Lehr and myself were negotiators for the Title IV Program Integrity Rules that were
being negotiated at the US Depart ment of Ed.·
"One of the issues that we have in this country is an extremel y high default rate on student
loans. For example, in Florida, we have about 1.2 million students in post-secondary education.
These are students enrolled in private insti tutions, for profit, and public institutions. Of those
students, about 167,000 take out loans. Of those, about 15 percent or over 25,000 students
defaul t on those loans."
[In response to the question "Some for-prof it schools claim that the legislation would limit access
to education for many students. Is that the case?"] :
"Actually, that's not the case. Even the US Department of Education's own analysis indicates
that only six to eight percent of the programs in the United States would be impacted. Basically,
what they're trying to do is go after programs that really are abusing students - what they call
the bad apples."
"To give you a case in point. here in Jacksonville, we have three for-profits that only account for
just about 4 percent of the total post-secondary enrollments in Jacksonville, but they account for
over 41 percent of the defaults. Now think of it - three institutions whose enrollments are less
than 17 times the enrollments of UNF and Florida State College at Jacksonville. 17 times
smaller, yet the total defaults that those three institutions are greater than the defaults at the
University of North Florida and Florida State College:
' Those institutions account for 4.6 percent of the total post secondary enrollment and 40.7
percent of all defaults."
"Think about that. If their product is defective, would you go out and buy an automobile if you
knew that the automobil e would blow up? Shouldn't it have some sort of regul ation to protect the
consumer, if one in seven is going to default?"
"First and foremost. students shoul d look at education as any consumer product they're going to
purchase. They should look around. They should shop, There's a vast different between what it
costs to receive an education at any of the institutions that are located in Jacksonville. That
goes for the for-profits, that goes for the publics:
"The highest level of accreditati on is regional, not national. That causes confusion with student.
so they should ask, are you regionally accredited? If not, my advice is to tum around and walk
out the door:
-
From:
Sent:
To:
Subject:
Cunningham. Peter
Friday. April 30. 2010 12:11 PM
Shireman. Bob: Hamilton. Justin
RE: interview request from dan goldenlbloomberg news
(b)(5)
From: Shi reman, Bob
Sent: Friday, Apri l 38, 2818 9:28 AM
To: Hami l t on, Just in
Cc : Cunni ngham, Peter
• 1: 1. ,. • ... _
(b)(5)
gol de n/ bloomberg news
From: DAN GOLDEN, BLOOMBERG/ NEWSROOM : (b)(6)
Sent : Thur sday, Apri l 29, 2819 11 : 37 ~ ~ . - - - - - - - - - - - - - - - - - - - - - - ~
To: Shireman, Bob
Subj ect : RE: i nt erview reques t from dan gol den/bl oomberg news
Bob,
you also be available
prefer) about why you
it reflects a shi ft in
(or even if I don' t f or some reason), would
Perhaps we could talk (on backgr ound if you
your public comment s on thi s i ssue, whether
Once I get t he speech
t o chat further about it?
decided to be stronger in
department strategy, etc .
I al so must confess a bi t of frust r at ion on one mat t er (for which you're not r esponsi bl e
in any way I know; I 'm grateful for your cooperation wi t h my stor i es) . I' ve been r equesting
an i nterview wi t h Ar ne Duncan on for -prof i t col leges for months without success .
Now I under stand he t alked t o Frontli ne . Given that I and Bloomberg have devot ed so much
time, energy and space t o exposi ng probl ems i n t hi s sect or , and t hat Front li ne (a very hi gh-
quality oper at i on t o be sure) appea rs to have basical ly fol lowed my stor ies and intervi ewed a
bunch of people I quoted, I t hi nk I deser ve at l east equal treatment and access t o t he
secretary . Any good word you coul d put i n f or me would be much appr eci at ed .
Yours ,
Dan
-- -- - Or i gi nal Me ssage -- - --
Fr om: Bob Shi r eman <Bob. Shireman@ed. gov)
To: DAN GOLDEN ( BLOOMBERG! NEWSROOM:)
Cc : Justin.Hamilton@ed .gov
At: 4/29 11 : 99 : 47
Justin:
Please note Dan's r equest (and t i ming of hi s pi ece, f or which I was int erviewed) .
- Bob
Robert Shi reman
De puty Undersecret ary
48
U. S. Department of Education
( 202) 260-0101
=-_=c-::::=::-===-:-::== :-:- I(b)(6) I
From: DAN GOLDEN, BLOOMBERGI NEWSROOM:
Sent : Thursday, Apri l 29, 2010 10:01 AM
To: Shireman, Bob
Subject : RE : interview request f r omdan golden/bloomberg news
Hi Bob,
Thanks very much f or your help wi t h t he homel ess stor y. which i s i n the i ssue of Busi ness
Week on the stands tomor row.
I understand (f r om r eading I nside Hi gher Ed) t hat you gave a great speech about the f or-
profit sector yester day. Woul d you mind sendi ng me a copy as soon as pos si bl e ? We ' d like t o
do a news story on it.
Your s ,
Dan
--- - - Or igi nal Message - - ---
From: Bob Shi reman <Bob. Shi r eman@ed. gov)
To: DAN GOLDEN (BLOOMBERG/ NEWSROOM: )
At : 4/09 14: 28 : 26
87% (year ending Dec . 31. 2007)
Drake Col l ege of Busines s
Elizabeth
NJ
Ful l y Certified
12/ 31/ 2007
87 .19
3,366,489
6,629,924
-- - --Original Message---- - l( b)(6) I
From: DAN GOLDEN, BLOOMBERG/ NEWSROOM: @bl oomber g. net }
Sent: Friday, April 99, 2919 19: 59 AM
To: Shirema n, Bob
Subject : RE: i nt er vi ew r equest f r omdan golden/bloomberg news
Hi Bob,
How are you? Hope all's well. I know you're very busy - - were you able t o check t he 99/ 19
percentage of that New Jer sey school , Drake Col l ege of Business ?
Also, a Wall Street anal yst wrote a r eport yesterday ci t i ng "industry chat t er " that DOE
will seek more authority over academi c quality, dimini shing the accrediting bodies. If
ther e's any truth t o the chat ter , Bloomberg would be very interested in a story about it ,
since my piece about buying accreditation got a l ot of notice . So I' d very much l i ke t o chat
about that at some point .
Your s ,
Dan
--- - - Ori gi nal Message -- -- -
49
Fr om: Bob Shi r eman <Bob. Shi r eman@ed. gov )
To: DAN GOLDEN (BLOOMBERG! NEWSROOM: )
At : 4/ 06 11:43:16
Targeti ng vul ner able populat i ons who are not li kel y to benef it is one exampl e of over zealous
r ecruit i ng t hat can be dr i ven by paying recr uit er s based on enr ol l ment numbe r s .
--- - -Or i gi nal Message- - - - - !(b)(6) I
Fr om: DAN GOLDEN, BLOOMBERG/ NEWSROOM:
Sent : Tuesday, April 06, 2010 11: 21 AM
To: Shi r eman, Bob
Subj ect : RE: i nter view request f r omdan gol den/ bloomber g news
Hi Bob.
One qui ck f oll ow-up question . Whe re you sai d t hat "incenti ve compensation can dr i ve
r ecruit ers t o be over -zealous I " is it al so f air to say it's possibl e that r ecr uiti ng t he
homel ess could be one exampl e of t hat? I t ake your poi nt that if the progr am does provide
quality trai ning i t may be a good opt i on, whi ch i s why I say it ' s possibl e and coul d be.
Your s,
Dan
-- - - - Or i gi nal Mes sage -- - - -
From: Bob Shi reman <Bob.Shi reman@ed. gov)
To : DAN GOLDEN (BLOOMBERG! NEWSROOM:)
At : 4/05 22:47: 15
Tr y me around 11 a. m. t omorrow .
Robert Shi reman
Deputy Undersecretar y
U. S. Department of Educat ion
(282 ) 268-8181
Fr om: DAN GOLDEN, BLOOMBERG! NEWSROOM: (b)(6) @b loomberg . net ]
Sent : Monday, April 05, 2010 8: 18 PM
To: Shi r eman, Bob
Subj ect : interview r equest fromdan golden/ bl oomberg news
Hi Bob,
How are you? For the past f ew weeks I' ve been r esearchi ng a story about f or-profit
col l eges recr ui t i ng the homel ess. The i ssue of course is t hat t he homeless ar e not onl y a
vul nerable population (high rates of mental i llness , subst ance abuse, etc .) but al so need
federal aid t o pay the relatively high t uition. I f they default on l oans, their homelessness
may be pr ol onged because publi c housi ng authori ties and private l andl ords want tenant s with
good credi t .
I ' ve gathered qui t e a few exampl es of f or - prof i t r ec r ui t ers actual ly goi ng t o shelter s
and making pitches. It appears to be a pr et t y common practice.
I'd l i ke t o chat wit h you about thi s and di scuss t he possi bl e link t o broader pol i cy
i ssues. especi ally incent i ve camp. I wonder, i f r ecruit ers wer en't pai d on t he basi s of how
many student s can t hey enrol l , woul d they st i l l be haunti ng t he shel ters ? Ot her cont empl at ed
changes such as gai nful empl oyment mi ght per t ai n al so.
Would you have a f ew minut es t o tal k about t hi s t omor r ow (Tuesday) or Wednesday? I would
r eal ly appr eci at e it .
50
Yours,
Dan Gnl de n
51
From:
Sent :
To:
Subject :
Shireman, Bob
Friday, April 30, 2010 10:39 AM
Hamilton, Justin
FW: Arne's Frontline interview today
(I was not interviewed on camera for Frontli ne).
From: Shireman, Bob
sent: Friday, April 30, 2010 10:00 AM
To: Rogers, Margot; Kanter, Martha; Rose, Charlie; Miller, Tony; Martin, Carmel; Gomez, Gabriella
Cc: Cunningham, Peter
Subject: FW: Arne's Frontline interview today
Peter asked me to forward this again. t-ly notes on Arne's responses are at the BOlTOM.
-Bob
From: Shireman, Bob
sent: Wednesday, March 24, 2010 10:14 PM
To: Cunningham, Peter; Rogers, Margot; Kanter, Martha; Miller, Tony; Martin, Carmel; Rose, Charlie; Yuan, Georgia;
Gomez, Gabriella; Madzelan, Dan
Cc: Manheimer, Ann
ubi • ,' e:
(b)( 5)
52
(b)(5)
53
From:
Sent :
To:
Cc:
Subject:
Good Afternoon,
Williams. GenaI(b)(6) !@b1ankrome.coml
Tuesday. April 27, 2010 2:49 PM
Shireman, Bob; Yuan. Georgi a
Andrews, Dwayne
Meeting request on behalf of the Charleston School of law and Blank Rome Government
Relations
I am writing to request a meeting on behalf of the Charleston School of Law r CSl ") to discuss the impact that the
reported draft regulations defining "gainful employment" will have on proprietary law schools like CSl. CSL would like to
discuss some modifications that it thi nks will address its concerns. We would like to have this discussion as soon as
possible, and depending on the timing a senior member of CSl 's leadership team will attend, as well as Dwayne Andrews
and Michael Cioff i from Blank Rome.
Thank you for your consideration. Please feel free to contact me if you have any questi ons or concerns about this
meeting request.
Gena Wi lliams I Secret ary t o Dwayne Andrews. Principal 1Bl ank Rome Government Relati ons lLC
Watergate 600 New Hampshire Avenue, NVI/ 1war hinoton y 20037
Phone; 202.944.35111 Fax: 202.772.5858 1E m a ~ { b)(6) BlankRome.com,
-----_._---_ -._- _._._--_._- - - - - -_.
This message and any attachments may contain confidential or privileged infor mation and ar e only for t he use of the Intended
recipient of t his message. If you arc not the intended recipient, please nolif)' the sender b)' retu rn email, and delete or destroy
t his and all copies of Ihis message and all att achments. Any unauthorized di sclosur e, use, dist r ib ut ion, or reproduct ion of t his
message or any attachments is prehibltcd and may be unlawful.
............................._ .
Any Federal tax advice contained herein is not intended or written to be used, and cannot be used by
you or any other person, for the purpose of avoiding any penalt ies that may be imposed by the
Internal Revenue Code. This disclosure is made in accordance wit h the rules of Treasury Department
Circular 230 governing standards of practice bef ore the Internal Revenue Service. Any written
statement contained herein relating to any Federal tax transaction or matter may not be used by any
person without the express prior written permissi on in each instance of a partner of thi s firm to
support the promotion or marketing of or to recommend any Federal tax transaction(s) or matter{s)
addressed herein.
***************************************************************************
62
From:
Sent:
To:
Cc:
Subject:
Pauline Abernathy [pabernathy@ticas.org)
Sunday, April 25. 2010 3:42 PM
Pauline A r Deanne Leonin; Margaret Reiter "(b)(6) @fsg.edu; ,.".
(b)(6) (b)(6) nacacnet.org;
b 6 publicadvocates.or Q;tauren Asher; Barmak Nassirian; Chris Lindstrom; SIeve Surd;
Connie Myers; Luke Klipp; Michelle Rodriguez; Edfe Irons
Manheimer. Ann; Arsenault. l eigh
AG investigations
FYI The article below indicates that the AGs in IL and OR are investi gating EMCs art instit ute schools for t heir
relat ionships btwn the schools and t he providers of loans t o st udents at the schools (it was di sclosed on EMC fil ings wit h
the SEC) .
Another downtown for-profit school:
And this article suggests the OH AG may be opening an investi gat ion into Delta Career Education Corp and its Miami
Jacobs Career College: http://www.middl etownjournal .comLnews/middletown-news/ miami-jacobs-students-share-their-
frustrations-669850.html?showComments-true&oost ingld- 669939&imw- y
The WSJ is reporting t hat the CCA commissioned report helped drive for-profi t stocks down this week, despite enrollment
growth over 20% and profit growth over 50% : http://onl ine,wsj ,Com/article/ BT-cO-2Ql QQ423-
711672.htrnl?mod-WSJ Iatestheadfines
64
From:
Sent :
To:
Cc:
Subj ect :
Jamienne S. StudleYI(b)(6) !@publicadvocates.org]
Thursday, April 22, 2010 10:1 9 AM
p
b 6 gmail. com; dloonin@nclc.org; Debbie Cochrane;
(b)(6) fscj.edu; Manheimer, Ann; Arsenault, LeighYb)(6) @nacacnet. org;
(b)(6) newamerica.net;[(bH6l @publicadvocates.0.LQ
Re: ITT Educat ional services l awsuit
My plane is about to leave; if someone can do that review of the case, great, ifnot Michelle Rodriguez in my
offi ce may be able to get someone to do a fast overview, contact her directly
Sent from my iPhone
On Apr 22, 2010, at 4:49 AM, "Pauline Abernathy" <pabcrnathy@ticas.org> wrote:
Nb this new lawsuit alleges falsification of j ob placement figures. Would be worth reviewing the sui t to see what
evidence is offered as to how ere. Article also cites the CA AG settlement.
----- Original Message -----
From: Google Alert s <googlealerts-noreplyCiVgoogle.com>
To: Pauline Abemathy
Sent: Wed Apr 21 11:55:40 2010
Subject: Google Alert - ITT Educational services
Google News Alert for: ITT Educational services
ITT Educational Changed Test Scores , Ex-Employee's Suit Says
<http:// www.google.com!url?sa- X&g-http:// www.bus inessweek.com/ news!20 I 0-04-2 I/itt-educational-changed-
tcst-scores-ex employee-s-suit-
says.html&ct- ga&cad-l :2:0&cd- oOzNINoaRIU&usg- AFOjCNEbmguXuyoArATiTwGfgGxdEWVcVO>
BusinessWeek
By John Lauerman April 21 (Bloomberg) -- ITT Educational Services Inc., a for-prolit educat ion company, changed
applicants' test scores to allow them to ...
Sec all stor ies on this topi c
<http://www.google.com!url?sa X&g hnp://news .google.com!news/story%3Fncl%3Dhttp://www.busi nessweek. co
mJnews/20 I 0-04-21 Jitt-educational-changed-cesl-scores-ex-employee-s-suit-
says.html%?6hl%3 Den&c l ga&cad 1:2:0&cd oOzNINoaRlU&usg AFOj CNFS2M98wuZj kbUVka jE6oEc70X8x
A>
This once a day Google Alert is brought to you by Google.
Remove <hnp:llwww. google. comJalcrtsJremove?s- AB2Xq4g0 RiN wcIDFz9-
OhgdOK8&hl-- en&gl us&source- ale rtsmail&cd- oQ?NINoaRlU&cad- I :2:0> this alert .
Create <hnp:llwww.google.comJalerts?hl another
alert.
Manage
<http://www.google.com!alcrts/manage.?hl- en&gl- us&source-- ale rtsmail&cd - oOzNINoaRIU&cad- }:2:0> your
alerts.
65
From:
Sent:
To:
Subj ect:
Shireman, Bob
Thursday, April 22, 201 0 7:56 AM
DAVIDBAIME
RE: Hoping to schedule
Today woul d be better - we coul d tal k t his afternoon. Ot herwise, work with leigh.arsenaul t @ed.govto find a t ime next
week (but she is out today).
From: DAVID BAI MEl(b)(6) Waacc.nche.eduJ
Sent: Thursday, April 22, 20106:24 AM
To: Shireman, Bob
Subject: Hoping to schedule
a ten minute call with you early next week. Two topics, gainful employment and the TAA program.
I f you can do thi s how would I arrange it?
David
Thi s email has been scanned for all viruses by the MessageLabs Emai l
Security System.
From:
Sent:
To:
Subject:
DAVID BAIMEI<b)(6) /e:aacc.nChe.edU]
Thursday, Apri 22, 20 06:24 AM
Shireman, Bob
Hoping to schedule
a ten minute call with you early next week. Two topics, gainful employment and the TM program.
If you can do this how would I arrange it ?
David
This email has been scanned for all viruses by the MessageLabs Email
Security System.
67
From:
Sent:
To:
Cc:
Subject:
Jordan, Stacey
Thursday, Apri l 22, 2010 6:12 AM
Shireman, Bob
Honeysett. Adam
Re: CCA outreach to Mayors against gainful employment
Ok l et us know if we can hel p i n anyway
- - - - - Or i gi nal Message -- - - -
Fr om: Shi reman, Bob
To: Jordan, Stacey
Sent: Wed Apr 21 21:52: 58 2el e
• ...... .. rr.
(b)(5)
Robert Shirema n
Deput y Undersecretary
U. S. Department of Educat ion
( 282) 268- 8181
From: Jordan, St acey
Sent : Wednesday, Apr il 21, 2818 1:48 PM
To: Shirema n, Bob
Subj ect : RE: CCA out r each t o Mayors against gai nful employme nt
(b)(6)
U. S. Department of Education
From: Shi reman, Bob
To: Ritsch, Massie
Sent : Tue Apr 20 14:54:31 2010
Subject : FW: CCA outreach t o Mayors against gainful employment If we wanted to send somet hi ng
to Mayors , how would we do that?
From: Pauli ne Aber nathy Imailt o: pabernat hy@ti cas . orgl
Sent: Tuesday, April 20, 2010 3: 45 PH
To: Ma nheimer , Ann; Ar senaul t , l eigh; Gomez, Gabr i el l aj Kvaal , James R. j Shireman, Bob
Cc: Debbie FrankI e Cochrane
Subject : CCA out r each to Mayors agai nst gai nf ul employment
FYI-- I j ust got t he emai l below from a f ormer col league i n t he Phi l adelphia Mayor ' s of f ice .
As you' ll see, EDMC has hi r ed a f irm t o get l ocal elect eds and ot hers t o send let t er s t o
Senators Casey and Specter aski ng them t o oppose the gai nful employme nt r egulation and to
ur ge ED t o l et "Congr ess hand l e t hi s i ssue i ns tead. " Mayor Nut ter wi ll not be si gni ng t his
l et t er but it woul d be wor t h the Admini stration r eaching out to the conference of mayors and
other state and local elected assoc i at ions on thi s i ssue .
Text of ema i l sent to mayor ' s of fice :
We are working as l ocal consul t ant f or EDMC, the parent company of t he Art I nst i tute of
Philadelphia The US Department of Education has proposed a rule t hat would make ent ire
programs ineligible for federal Title IV ai d ( l i ke Pell grants) if they fail to meet a
certain debt -to-income rat io for st udents upon graduation . I t ' s a bit wonky, but what it
boil s down to is concern that programs like those offered at the Art Institute of
Phi ladel phia coul d be impacted if this rule goes through and coul d limit access f or st udents,
and adul ts swi t chi ng or starting car eer s to obtain degrees in suc h ca reer t r acks like graphic
and fashion desi gn, culinary arts, f i lmmaki ng and phot ography and more .
We're seeki ng to bui ld suppor t f r om i ndi vidual s and organi zat i ons t hat can attest t o t he
i mpor t ance of t hese progr ams f or career t rai ni ng and educ at ion i n t he Philadel phi a region and
the import ance of t hese careers t o our l ocal economy . We're aski ng f or a show of support i n
t he for mof written l et t ers to our Pennsyl vani a Senators , Arlen Specter and Robert Casey
about t hi s iss ue, expressing suppor t f or AI Ph i l adelphi a and it s programs , explai ni ng how
impor tant t hey are f or t hose seeki ng to st ar t ca reers in the aforement ioned arenas, and
aski ng Senators Casey and Specter t o contact t he Dept of Ed t o oppose t hi s rule and have
Congress handle this i ssue i nst ead .
Pauline Abernathy
Vice President
The Institute f or College Access &Success
510.883.7303 www .ticas . org<f ile: / / / \ \www.ticas . org>
69
From:
Sent:
To:
Cc:
Subject:
Attachments:
Tina Milanol(b)(6)
Wednesday, Apri121. 2010 10:45 AM
Shireman, Bob
Damieder. Greg
Going Ahead
imageOO4.jpg; image005.jpg; i mage006.j pg
Bob, just read your comments in the Going Ahead with Gainful Employment article in Inside Higher Education. I appl aud
your stand and the work you are doing. Just, fyi , at CSP we have ended our awards for students who elect to attend
proprietary schools. Keep up the great work in DC... we continue to count on you. Let me know if there is anything I can
ever do to help.
Warm regards,
Tina
Christina R. Milano
CEO
Cleveland Scholarship Programs
70
From:
Sent:
To:
- .
(b)(5).(b)(6)

Shi reman, Bob
Wednesday, April 14, 201 0 5:45 PM
Arsenault, Leigh; Yuan, Georgia
c • .
-- - - - Or igi nal Mes s age -- - --
From: Lei gh
To: Shi reman, Bob
Sent: Wed Apr 14 16 : 07: 09 2010
Subj ect : FW: Can I get a t ime wit h Bob?
FYI- - I haven' t r es ponded yet . Want ed t o check with you f i r st .
-- - - -Or i gi nal Mes s age - -- - -
Fr om: Ca riel l o, Denni s M. [mai l t o:dcar i el l o@sonnens chein . com]
Sent : Tuesday, Apr i l 13, 2810 7:42 PM
To: Arsenault , Leigh
Subject : RE: Can I get a time wi t h Bob?
l ei gh ,
I j us t want ed t o f ol l ow up - any s hot at getti ng a meet ing wi t h Bob i n t he comi ng weeks ?
Denni s
Dennis M. Car i el l o
Sonnenschei n Nat h &Rosent hal l lP
Two World Fi nanci al Cent er
New Yor k, NY 10281
Direct : 212. 398. 7636
Cell : 917- 613- 3235
Fax : 212.768.6800
dcariel lo@sonnens chein . com
www.sonnensc hei n.com
---- ------------------------- ------ ---------- ----------- ------ ---------
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This e -ma i l and any attachments are confi dent i al and may be pr otected by l egal privi l ege . If
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71
not intended or writ ten t o be used, and cannot be used, for the pur pose of ( i ) avoiding
penal t i es under the I nter nal Revenue Code or (ii ) promoti ng. marketing or recommending any
t r ansact i on or matter addressed herein t o another party.
- - - - -Original Message--- - -
From: Cari ello. Dennis M.
Sent: Monday, April 12, 2919 11:44 AM
To: Arsenault. leigh
Subj ect : Can I get a t ime wit h Bob?
l ei gh.
I hope you are doi ng wel l . I wanted to see if Bob had any dates this week to t al k about
gainf ul employment? I represent I nf i l aw, a systemof f or -profi t accredi ted law sc hools
(i .e., Fl ori da Coasta l l aw School ) t hat have some thought s about the proposed rule .
If possibl e, t he Undersecretary and Georgia Yuan woul d be helpful i nvitees as wel l.
also be tryi ng to meet with Tony Miller al so - so i f it makes sense for him to come,
would be great . Otherwi se I can meet wit h him separ atel y.
Thanks .
Denni s
-- - - -Original Message-----
From: Ar senault, leigh [mai lto: lei gh .Arsenault@ed.gov)
Sent : Friday, February 26, 2919 4 : 12 PM
To: Cariello, Denni s M.
Subject : RE: How are you
I will
that
Hi Denni s ,
Unf ort unat el y Bob was out of the office on t hese days. Pl ease l et me know Brent wil l be
t raveling to DC in the near f ut ure- -wi l l be happy to accommodate.
l eigh
Office of the Under Secret ary
u. S. Depart ment of Education
leigh .ar senault@ed.gov
-- -- -Or i gi nal Message- - - - -
Fr om: Cari ello. Denni s M.
Sent : Monday, Februar y 22 , 2919 8 : 18 PM
To: Smi t h, Zakiya
Cc : Arsenaul t , l eigh
Subject : Re: How are you
Thanks so much f or get ting back t o me - and congrats on the move !
l ei gh- t hanks i n advance f or considering thi s request . I f you'd l i ke t o talk, I ' m at 917-
613-3235.
72
Thanks ,
Denni s
Denni s M. Cariello
Sonnenschei n Nath &Rosent hal LLP
Two Wor l d Financi al Center
New Yor k, NY 18281
Di r ect: 212.398 .7636
Cell : 917-613-3235
Fax: 212. 768 . 6888
[(b)(6) @sonnenschei n. cOll!'''
www. sonnenschein .com
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To comply wit h r equi r ement s imposed by the IRS, we i nform you t hat any U.S . feder al tax
advice cont ai ned her ei n ( i ncl udi ng any attachments), unl es s speci f i cal ly st at ed ot herwise, i s
not i nt ended or written to be used, and cannot be used, f or the purpose of (i ) avoiding
penalties under t he I nt er nal Revenue Code or (ii) pr omot i ng, market ing or r ecommending any
t r ansaction or matter addressed herei n t o anot her par t y.
-- - - - Ori gi nal Message ---- -
Fr om: Smi t h, Zakiya <Zaki ya. Smi t h@ed. gov>
To: Cariel l o, De nni s M.
Cc : Arsenault , Lei gh <Lei gh. Ar senaul t@ed. gov>
Sent : Mon Feb 22 18:58:24 2919
Subject : Re : How are you
Hi Denni s -
In the time that you've been gone, I ' ve act ual l y moved over to OPEPD.
Lei gh (copied here) i s now wor ki ng with and keeping track of Bob these days .
Sent from my iPhone
On Feb 22, 2919, at 7: 24 PM, "Ca riello, De nnis M. " <dcar i ello@sonnenscliei n. com > wr ote :
with Br ent?
Br ent Richardson, the CEO of Grand Canyon
publ i cl y traded, propri etary school - wi l l
Thursday morning and wanted to see if he
I t 's been t oo long see we l ast connect ed.
Thanks so much.
I hope you are well .
I had a questi on f or you.
University i n Arizona - a
be in DC on wednesday and
> could meet with Bob.
> Does he have 39 minutes he coul d spar e to meet
>
>
> Zaki ya,
>
>
>
>
>
>
73
)
> Dennis
)
)
)
> Denni s M. Car i ello
> Sonnenschei n Nath &Rosent hal LLP
) Two World Fi nancial Cent er
> New York, NY 10281
> Di rect: 212.398 . 7636
) Cell : 917-613-3235
212 . 768. 68e0
>J<h)(6)
> www.sonnensc hein . com
)
)
>
) CONFIDENTIALI TY NOTE :
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> by l egal pr ivi l ege . I f you ar e not t he intended reci pient, be awar e
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> er ror . please not i f y us i mmedi at ely by r et ur ning i t t o the sender and
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> To comply with r equirement s imposed by t he IRS, we inform you that any
> U. S. federal tax advi ce contained her ein (i ncluding any attachme nts),
> unless speci f i cal l y st at ed otherwise, i s not i ntended or written to be
> used, and cannot be used, f or the purpose of ( i) avoi di ng penalties
> under t he Internal Revenue Code or ( i i) pr omot ing, marketing or
> r ecommending any t ransaction or matt er addressed her ein t o anot her
> part y.
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74
From:
Sent :
To: .
Subject :
Arsenault, Leigh
Tuesday, April 13, 2010 2:03 PM
Babyak, Stephanie; Glickman, Jane
FW: Press Question on Gainful Employment Gains

Fr om: Shireman, Bob
sent : Tuesday, April 13, 2010 1:51 PM
To: Hami lton, Justi n; Arsenault, l eigh

(b)(5)
From: Hamilton, Justin
To: Arsenault, Leigh; Shireman, Bob
Sent: Tue Apr 13 12:40:48 2010
Subj ect: Press Quest ion on Gainf ul Employment Gains
Bob,
Does any of thi s sound famil iar?
------ Forwarded Message
From: Doug Lederman <doug. lederman@i nsidehighered.com>
Dat e: Tue, 13 Apr 2010 09:24:57 -0500
To: "Hamilton, Just in" <just in.hamil ton@ed.gov>
Subject: Fwd: Signal Hill - Post-Secondary Educati on: Reli ef: Gai nful Employment Ga ins Alterna t ive Measure
Just in:
The analysts seem t o be putti ng t hei r own spin on information that they say they've gotten from OMB ... is there any
way to make sure th at they're present ing this info rmation accurate ly, etc.?
I' d love t o get my hands on t he document, or at least the porti on related t o gainful employment. If t here' s any way of
doing that, please let me know ...
Thanks,
Doug
---------- Forwarded message ----------
From: Trace A. Urdan <turdan@signalhi l l.com>
Date: r ue, Apr 13, 2010 at 7:20 AM
Subject: Signal Hill - Post -Secondary Educat ion: Relief : Gai nf ul Employment Gains Alte rnat ive Measure
To: doug.lederman@insidehi ghered.com
75
----------------------------------------------------------------------------
Busi nessServices - Education Services
Indust ry Update
Apri l 13, 2010 Relief : Gainful Employment Gains Alt ernative Measure
Trace Urdan
~ b ) ( 6 )
(b)(6)
Our Call :
As anticipated, Department of Educat ion (USDOE) draft regulat ions went to the
Office of Management & Budget (OMB) last Fri day 4/9 for revi ew pri or t o their
publicat ion in the Federal Regist er -- l ikely 5/15. A credi ble source close to
OMB t ell s us that while t he 8% medi an debt/income measure, and the 90% st udent
loan repayment measures appear t o be essent ially unchanged from the terms
present ed by the USDOE i n January, a third alt ernative measure has been added.
This measure would allow programs with a graduat ion rate of 50% or better and
a subsequent job placement (in the rel evant field) of 70% or better to qualify
out of the other two measures.
Though the devil will certainly be in the details, incl uding how t hese items
are t o be considered for st udent s that are t ransferring credit s and may be
al ready employed, the new measure effectively removes the significant threat
t he rules had creat ed for nationally-accredited degree programs with typicall y
high default rates. The new measur e, in fact. seems t o closely resemble rules
already imposed by nat ional accredi t ing bodies. And whi le we mi ght anticipate
that the terms could be st ricte r in USDOE' s concept ion, they should be
eminently achievable wit h minimal disruption for all programs.
Accordi ng to USDOEanalysis, (in process of bei ng reviewed by OMB,) the rules
themselves would only affect 6-8%of all for-prof it programs, wit h culinary,
automotive t ech, and nursi ng programs hardest hit. (We not e th at t his seems
out of keeping wit h our knowledge of t hese programs as represented by
publi cly-traded schools, but nevertheless appears t o represent a conclusion
reached by USDOE.) Our cont act indicat ed t hat the Universi ty of Phoen ix
(NASDAQ: APOL; Buy) was not seen as affected at all in the USDOE analysis.
While we expect all post -secondary school stocks to benefit f rom t he news, we
believe that the those names t hat had been most challenged by the existing
terms are likely t o see t he biggest benefit as a result of t he change. These
include lIT Educat ional Services (NYSE: ESI; Buy), Corint hi an Colleges
(NASDAQ: COCO; Buy). and Career Education (NASDAQ: CECa ; Buy) which recentl y
heralded graduat ion rat es comfortably above 50%. Though some individual
programs may st ill fail all th ree t est s, we bel ieve these are likely to be
i solat ed, rare and fi xabl e.
We view this apparent concession as evidence of a desire by Secret ary Duncan
t o defuse what was promising to be an area of real content ion, as evidenced by
House Republicans, members of t he Congressional Black Caucus, and Senat or
76
l amar Alexander all calli ng out the Secretary on this issue. Secreta ry Duncan
needs, in our opi nion, a diverse coal it ion of supporters t o pass hi s signat ure
issue: K-12 educat ion reform. Because t he Secretary' s K-12 proposals do not
easily fall wit hin typical part y boundaries, he really does need a biparti san
coalition in bot h the House and Senate educat ion committees t o pass his
version of [ SEA (NCLB). No concession at all would have kicked off a loud and
publi cized summer of public commentary. Because it is ve ry di ffi cult t o argue
that a 50% graduat ion rat e and a 70% employment rate is an onerous burden, we
think USDOE has effect ively neut ered the campaign to ditch the rule enti rely.
We st ill expect industry to challenge the rul e in publi c and likely later in
court, but based on our reli abl e source, we beli eve invest ors need no longer
fear that significant revenues coul d be at ri sk in t he event t hat the rules
are passed.
Please see end of t his report for importa nt disclosure(s)
Invest ment Analysis:
Important Disclosures
Analyst Cert if icat ion
I, Trace urdan, hereby certify t hat all of the views expressed i n thi s
research report accurate ly refl ect my personal views about t he subject
securit ies or issuers. I also certify that no part of my compensat ion was, is
or wil l be directly or indirectl y related to t he specif ic recommendat ions or
views expressed in t his research report. Signal Hill does not compensate it s
equity research analysts based on speci fic investment banki ng transacti on s.
Signal Hill Equity research analysts receive compensat ion based on several
factors, incl uding overall profitabi li ty and revenues of the firm, which
include i nvest ment banki ng reve nues.
Meaning of Ratings
Signal Hill uses a t hree-tiered rati ng system defined as foll ows:
BUY: We expect t his stock to outperform its peers over the next 12 mont hs:
HOLD: We expect t his stock t o perform in line wi t h it s pee rs over the next 12
months:
SElL: We expect t his stock to underperfo rm it s peers over t he next 12 months:
Distribution of Rati ngs/IB Services
Signal Hill
IB Serv'/Past 12 Mos.
Rating Count Percent Count Percent
BUYIBUY) 77 61.6 72 93.5
HOLDI HOLDI 47 37.6 38 80.9
SELLISELLI 1 0.8 1 100.0
Disclaimer
Thi s report has been prepared using sources we deem to be reli able but we do
not guarantee it s accuracy and it does not purport t o be complete . Thi s
report is publ ished solely for informati on purposes and is not intended to be
used as the pri mary basis for making investment decisions, which should
refl ect the invest ment objectives and financial sit uat ion of the investor.
77
The opinions expressed herein are subject t o change wit hout noti ce. This
report is not an offer or the solicit at ion of an offer to buy or sell
securit ies. Additional informati on is available upon request.
Doug Lederman
Editor, Inside Higher Ed
http://insidehighered.com
doug.lederman@insidehighered.com
1320 18th St reet, N.W., Fifth Fl oor
Washington, D.C. 20036
work: 202.659.9208, ext . 100
fax: 202.659.9381
cell : 301.503.4277
Join the new conversation in higher educat ion.
Sign up for your free daily e-mail news alert at http://insidehighered.com/sign up
------ End of Forwarded Message
78
l(b)(6)
From:
Sent:
To:
Subject:
Attachments:
Shireman, Bob
12, 2010 11:48 AM
(b)(6) career.org'
e: Wages Versus Actual Wages-Impact On Eligibility under the Gainful Employment
Ororvu,,,,l
80 out of how many that provided earnings data?
From: Harris Millerl(b)(6)
To: Shireman, Bob
cc: Kanter, Martha; Madzelan, Dan; Ber eron, David; MaJtb)imer. Ann: Arsenault, leighJ(b)(6) Ly
m(b)(6) b 6 ka Ian. om (bl(6) liikaplan.cgm>; I(b)(6) @edmc. u
(b)(6) u> (b)(6) h' .edu kb}(6} i@thjcaqob<:>2th.edu>; Thompson, Matthew
[@@j i!aai.com>; Brian Moranl(b)(6)
sent : Mon Apr 1209:24:422010
Subject: BLS Wages Versus Actual Wages--I mpact On Eligibility under the Gainful Employment Proposal
Bob: During the meeting last week to discuss the gainful employment issue, you asked why the
report prepared by Charles River Associates (eRA) and Dr. Jonathan Guryan that we presented
to you and your colleagues assessing the likely impact of the Department' s proposed rule did
not include an analysis of the impact on the results if "actual wages" were used by schools in
place of Bureau of Labor Statistics numbers in situations in which the BLS numbers lead to
failed eligibilit y.
The estimates in the initial report did not adj ust for these possibilities because the earnings data
provided to CRA by CCA member institutions was incomplete for most programs. Analysis
subsequent to our meeting of the incompl ete data indicates including the actual wage data
would allow few programs to retain eligibility that otherwise failed to meet the ratio test using
BLS data.
In the initial request for data, CRA asked CCA member schools to provide actual earnings data
to allow for an analysis of this portion of the proposed regulation. However, few institutions
have these numbers because they are not required to capture such data. Less than 3 percent of
programs analyzed were able to share actual earnings data that CRA j udged sufficient to be
used as an "alternative measure" to the initial debt to earnings calculation.
After our meeting with you, I asked CRA to "run the numbers," even with the very limi ted data
they had received on actual earnings. When the limited data were applied by CRA to programs
that did not meet the initial debt to earnings, only 80 would not fail the test using actual median
earni ngs. This would change the percent of impacted programs from approxi mately 18 percent
to approximately 17 percent, a minimal change. So the fundamental results of the study stand,
.,
namel y, the gainful employment proposal would have a substantial negative impact on higher
education opponunities across a wide range of occupations.
We also did not ask CRA to run the other alternat ive if a program fails the debt/earnings rati o
test----Ioan repayment rate of90%--because, as Mark Kantrowitz and others who have studied
the available data closely have pointed out, this repayment rate is so high that an institution
would have to have a cohon default rate ofless than 2.3% to qual ify, which few schools in any
sector have.
If the Department has its own data/analysis that would lead to a different conclusion than the
CRA analysis regarding the impact of the gainful empl oyment proposal, we would be glad to
recei ve and review it.
Harri s
Harris N. Miller
CEO/President
Career College Association
1101 Connecticut Avenue. NW, Suite 900
Was ' ton, DC 20036
(b)(6) areer
(b)(6)
Executive Assistant: Jackie McWil liams
\( b){6) W career.ora
(b)(6)
www.career.org
Save The Dat e

2010 Annual Convention
and Exposition
June 9-11, 2010
The Palazzo, las Vegas, NV
Leadership Institute
July 15-20, 2010
The Bolger Center
Potomac, MD
83
From:
Sent:
To:
Subject:
Thanks Paul ine!
Arsenault, Leigh
Friday, April 09, 2010 1:11 PM
Pauline Abernathy
RE: Young people and financial reform
Of f ice of the Under Secretary
U.S. Department of Educat ion
lei gh.arsenault @ed.gov
From: Pauline Abernat hy [mailto:pabernathy@ticas.org]
Sent: Friday, April 09, 2010 10:53 AM
To: James_R._Kvaal@who.eop.gov; Arsenault, Leigh
Subject: FW: Young people and financial reform
FYI In case for some reason you were not aware of today's WH call and the attached (which is good
on student loans!).
From: Caleb Gibson[(b)(6) !@demos.org]
Sent: Friday, April 10:27 AM
To: 'Angela 'Christ ina Hollenback'; 'Hilary A. Doe'; 'Rich @pirg.org)' ;
Luke Klipp; Pauline Abernathy; 'Gregory A. Cendana' ; 'Aaron Smit h'; Darby Hull !C
b
}(6) j@.consumerfed.org); Farid E. Ben
Amor
Cc: Gennady Kolker; Robert Hiltonsmith; Lucy Mayo; Viany Orozco
Subject: RE: Young people and fi nancial reform
Also, in case you hadn't seen it, the White House is doing a call on financial reformwith youth orgs today. (Thanks,
Christina.)
WHEN: Friday, April 9, 2010 2:00PM-2:30PM
HOW: Please call (800) 553-0327 and ask lor the "White House Regulatory Relorm Call:'
I have attached the WH's fact sheet on how financial reform affects Young Americans that they circulated with this
nouce.
Thankyou all,
Caleb
From: Caleb Gibson
Sent: Wednesday, April 07, 2010 12:11 PM
To: Gennady Kol ker; 'PdelatorrerIDame; nprogress(rQ' ; People5 usst udents.or ' . 'Christ ina Hollenback';
'Hilary A. Doe'; 'Rich pirg.org)' ; Ib)(6) ticas.org'; Robert Hiltonsrnith : (b)(6) @t icas.org'; Lucy
Mayo; 'Gregory A. Cendana'
Subject: RE: Young people and financial reform
Friends-
84
Attached, please find a DRAFTof a shon policy brief I drewup on WhyYoung Americans Need Financial
Refonn. It is based on the outline I shared with you last week
The hope is to a) release the paper collectivelyby several of our organizations, b) hold a press event with allies in
the Senate, and c) share widely with Hill staff and media. Please let me knowif you think)Our organization can sign
on. And to that end, I would love your feedback and suggest ions.
Please tty to let me knowbyfiBtomorrow(Thursday) if you can sign on. And!or definitely please let me knowif
;our need more time to run it up the chain. I will actually be out of the office on Friday and I'd love to get this to
our Communications staff for layout before the weekend. But I'd rather have more of )QU on board, so let me
knowif }QU need more time to look it over.
If you do want to sign on, please also send me a high- res logo.
Now is also the time to start thinking about Senators who might be willing to stand with us on this. I know Durbin
is a champ on the private loan issue. W'ho else have folks been working with who might be wonh reaching out to?
Thanks everyone!
-Caleb
-----
From: Caleb Gibson
Sent: Friday, April 02, 20104:55 PM
To: Gennad Kolker
Cc b 6 americanprogfess.org; Angela Christina Hollenback; Hilary A. Doe; Rich
Williams (b)(6) pirg.org); Iklipp@ticas.org; Robert Hiltonsmith; 'pabemathy@ticas.org' ; lucy Mayo
Subject: RE: Young people and financial reform
And here is a link to the Roosevelt Campus Network's excellent millennial- perspective analysis of the bill and its key
provis ions.
hup;ll www.rooseveltcampusnetwQrk.0rUPo!icy! reform- millenniaIs-analysis
Thanks again to everyone for taking time out of your Friday afternoon for the call today. For those of you we
didn't speak to today, I'll followup early next week.
Have a great weekend, all.
-Caleb
From: Gennady Kol ker
Sent: Friday, April 02, 2010 2:42 PM
To: Caleb Gibson
Cc: (b)(6 mericanprogress.org; Angela Christi na Hollenback; Hilary A. Doe; Rich
William (b)(6) pirg.org); IkJipp@ticas.org; Robert
Subject: Re: Young people and financial reform
Here's the piece I mentioned by the Prospect's Tim Fernholz (also includes useful links to other terrific coverage
by the Prospect)
LI NK: h1!P://www.prospcct.orgics/articlcs?article=a wall steet cheat sheet
8S
-Gennady
On Apr 2, 2010, at 1: 15 PM, Caleb Gibson wrote:
Hey everybody-
This is a reminder that we'll be having a call today at 2PM EDT to discuss general interest in coordinating our
message on financial reform for young people.
Conference Dial-In Number. (951) 262-4343
Participant Access Codc: 77810
I've attached a rough outline of a policy brief I am working on that makes the case about why reform is important
to the young Americans. I'm working on filling in the middle sections, but I wanted to let you see the general shape
of the message so far. Take a look if you have the time. We' ll run over it quickly on the cal l,
Again, here' s a rough agenda:
• Overview of reform legislation
• Main areas of importance to young people
• Work already undertaken by our groups
• Level of interest!capacity of the groups
• Other organizations to bring in
• Proposed actions
• Timing
• Immediate next steps
Thanks!
-Caleb
<image003.j pg>
Caleb A. Gibson
Federal Affairs Ma nager
Demos: A Network for Ideas & Act ion
1710 Rhode Island Avenue, NW
12
th
Floor
Washington, DC 20036
202/559- 1543
<Why Young Americans Need Financial Reform DRAFT OUTLI NE.docx>
Gennady Kolker
Online Communications Coordinator
Editor, Ideas Action Bfoq
Direct: (21 2) 389-1408
Cell: 925) 437-4522
(b)(6) emos.or
www.demos.org
86
Follow on Twitter: hlt p:/fwwv.I.twitter.comlDemos Org
Vi sit Demos' online policy and research center at WW'N.demos.org.
87
From:
Sent:
To:
Subject :
Shireman, Bob
Monday, April 12, 2010 11;37 AM
Babyak, Stephanie
Re: AOL NEWS-2nd request
We'd. Be happy to fact check it but we can', respond is we don't know what it says.
From: Babyak, Stephanie
To: Hamilton, Just in; Shireman, Bob; Glickman, Jane
Cc: Arsenault, Leigh
sent: Mon Apr 12 09: 36:37 2010
Subject: AOL NEWS-2nd request
John Merline has cal led agai n. What should I tell hi m?
From: Babyak, Stephanie
Sent: Friday, April 09, 2010 3:41 PM
To: Hamilton, Justi n; Shireman, Bob; Glickman, Jane
Cc: Arsenault, Leigh
Subject: ACTION lTEM:AOL NEWS
Importance: High
I just spoke wit h John Merline, AOL News, about the site running an op-ed by Colorado State Uni versity
president (not sure if this i s Dr. Frank, but he would not give the author's name) on the "gai nful employment
rule" and whet her the Department would wa nt t o run a side-by-side response.
We chatted about t he aut hor's perspecti ve (t he ru le would prevent st udents from getti ng loans, t hat the
department has gone t oo f ar, etc.]. However, Merline was not aware that the Depart ment had not actually
ublished an rules et and so was ol n t o reiect t he idea.
(b)(5)
93
From:
Sent:
To:
Subject:
INonresponSive
Rogers. Margot
Thursday, April 29, 20107:50 AM
Cunningham, Peter ; Kanter, Martha; Miller. Tony
RE: Here's the story: "Comparing Higher Ed to Wall Street"
Fr om: Cunni ngham, Pet er
Sent: Thursday, Apri l 29, 2818 7: 41 AM
To: Kant er, Ma rt ha; Rogers , Margot ; Mill er, Tony
Subject: RE: Here' s the story: "Compa ring Hi gher Ed to Wall Street"
r
Compari ng Hi gher Ed to Wa ll St r eet
Whenever wor r ied l eaders of fo r- pr ofit col leges have impl i ed in r ecent months t hat the U. S.
Education Depar t ment i s gunni ng fo r the i nst i t ut i ons , of f i ci al s of t he f ederal agency have
di scouraged such t alk, <htt p://www. i nsi dehighered.com/ news/ 2889/86/ 16/cca> offe r i ng
evenhanded rhet ori c about t reat i ng al l sectors t he same in their pus h for i nc reased
accountability.
The wor ds have pr ovided little r eassur ance t o t he col leges, si nce t hey haven' t always seemed
t o square with t he aggr essive approach
<htt p://www. i nsi dehighered.com/ news/2818/ 84/21/gainful> the Obama admi nist r at i on is taki ng
i n r ewr it ing f ederal rul es gover ni ng vocat iona l and ot her programs .
On Wednesday, in a speech t o state r egul at ors who oversee for -prof it col l eges , t he chief
architect of the Education Depar t ment's st rategy, Robert Shi reman, of f ered a mu ch more
cri t ical assessment of t he private sector i nsti t utions t han he has i n hi s publ i c comments t o
dat e, accordi ng to accounts given by several people who we re in the r oom. He compar ed the
institutions r epeat edly to t he Wa l l Street f irms whose behavior l ed t o t he f inancial meltdown
and cal led t hemout individuall y, one by one, f or t he vast and quickly i ncreasing sums of
f ederal st udent ai d money t hey are drawing down.
Whi l e Shi rema n's comments were aimed most directly at the for- profit col leges t hemselves,
they may be most not eworthy for hi s i ndi ctment of acc redi tation, hi gher educat ion's systemof
i nstitutional peer review. In Shi reman 's narrative bef ore the annual meeti ng
<htt p://www . nasas ps .org/conference/ registration- ma teria ls> of the National Association of
State Admi nistrators and Supervisors of Private Schools , t he accrediting agenc ies are to the
for-profi t colleges what t he Wa l l St reet r atings agencies were to t he mi sbehaving fi nanci al
firms : entities charged wi t h r egul at ing an i ndust ry that has gr own too quickly and t oo
complex f or them t o cont rol , and that have an "inher ent confl ict of interest " because their
existence depends on f inancial cont ribut ions fromthose they r egu l at e.
Acc r editors lac k the "firepower" t o r egulat e t he f or-profi t sector, and t he states and t he
f ederal government don' t necessari l y have al l t he tools t hey need to do i t eit her , Shirema n
sai d, accordi ng to the not es of several i n the audience. That, he suggested, is why t he
Educat ion De par t me nt must t oughen i ts r ules in t he way i t is now proposi ng .
Shi reman could not be r eached fo r comment, and an Education Department spokesma n sai d i t s
of f icials di d not wis h to comment on t hi s article .
To several peopl e in t he audience, Shirema n's comments r epresent ed a much more candi d (and
crit ical) appraisal of t he for- profit sector than he has offered publ i cl y si nce he became
56
deput y under secretary of education almost exact ly a yea r ago
<ht t p:// www.i nsidehighered.com/ news/2009/04/21/shi rema n> . Ma ny suppor ters of t he education
compa nies fea red hi s appoi ntment because t hey believed hi s track r ecord as an advocate f or
l ow- income st udents and a foe of st udent debt woul d r esult i n a crackdown on t he
inst itutions , whose st udents are dispr oportionately needy and di sproport i onat ely go int o
heavy debt <ht tp://www.i nsidehighered.com/ news/2919/ 94/27/debt> t o f i nance t hei r educat ions .
But wi t h Wall Street analysts hanging on hi s every word
<htt p://www.i nsi dehighered.com/ news/2009/96/01/qt#200115> l ooki ng for sni ppets t hat might
t hreaten t he publ i cly t r aded companies ' stock pri ces , Shi reman has often seemed t o go out of
hi s way t o avoi d si ngling the i nstit utions out for criticism.
A t ypi cal quotat ion, from l ast summe r : <ht t p://www. i nsi dehighered .com/ news/2009/06/ 16/cca>
"Our overall goal at t he Department of Education i n post secondary education i s to make sure
that st udents . . . have the i nfo r mation they need t o make good choices, and t hat they have
good qual i t y postsecondary education t hat serves bot h them as st udents and taxpayers as
well," Shirema n sai d. " . .. If there is not qual ity, we wa nt to know about it and if we can, we
want to do somet hi ng about i t. Whet her that i nvolves a publ ic i nsti t ution, a nonprofit , a
fo r- profi t, a two-year, a four-year , a t r ade pr ogram, whatever type or sector of i nst i t ut i on,
we wa nt to do all we can to make sure that we have good quali t y."
Di fferent Tone
In hi s comments Wednesday, Shi rema n l ai d out t he context underlying the Obama
admi nist ration's elevat i on of hi gher education as a cent ral f ocus of i ts domest i c pol i ci es .
The economic slide created i n part by t he col lapse of t he cr edi t mar ket s has sent Ame ricans
st reami ng back t o college in r ecord numbers, and has made i t more i mperat ive than ever that
more Amer icans get a hi gher educat i on to st rengt hen the country 's economic base f or the
future, Shireman sai d.
The admi nistration has poured tens of bi l lions of dollar s i nto Pel I Grants and r est ructured
t he federa l st udent loan progr ams t o try to e nsure t hat Amer i cans have access to higher
education, Shi rema n said wednes day. Many publi c i nst itutions, faci ng cuts i n t hei r state
f undi ng, have had to limi t or even cut their enrol l ments, r educi ng t heir abil ity t o meet t he
i ncreasi ng demand fromst udents .
The f or- pr of i t col leges, by cont rast, have stepped up , seei ng their enrollments explode --
and wit h them, t he amount of Pell Grant money that f ollows the students t o t he i nstit ut ions,
Shireman said. Anyone in t he audience f rom Corint hian Colleges? Shirema n asked the assembled
audience Wed nesday.
A hand we nt up. The California-based f or- prof i t hi gher ed company has seen i t s revenue from
Pell Grants grow by 38 percent i n t he fi r st t hree quar t ers of this fiscal year compared to
the last one, he said . Anyone fromDeVry? Fort y-t wo percent, Shireman said. Strayer? ITT? One
by one, he ticked th r ough a l ist of publicly t raded companies, point ing out the i ncreasing
amounts of f eder al money t he institutions were collecting ( " It was like f ourth grade, wit h a
teacher scol ding students over thei r grades, " sai d one per son who was in t he room).
What are taxpayers and students getti ng i n r et ur n for t hat i nvestment? Shireman as ked. It has
hi st ori cally been up to the "triad" -- t he thr ee-headed r egul at ory scheme i nvolvi ng t he
fede ral government, st at e gover nme nts and accredi t i ng agencies -- to ensure access, qualit y
and int egr i t y in hi gher education, he said .
But i s t hat r egulatory system up to t he j ob? To draw a paral lel , Shireman not ed that as thi s
meet i ng was unfolding in St . Paul, pol i t i ci ans back i n Was hi ngton were debati ng possible
r ef orms of Wa ll Street, to t ry to fi x t he "flawed" r egul at ory process that allowed Goldma n
57
Sachs and ot her pur veyors of subpr i me mortgages t o engage i n mi sbehavior that helped
devastat e t he economy.
One major r eason the process was fl awed, Shirema n said, was because the bond ra ting agenc ies
t hat we re supposed to be judging t he r iski ness of the fi nancial i nst r uments we re suppor t ed i n
large part by fees from the companies t hat were as ki ng t he agenc ies t o r at e the fi nanci al
instrument s -- "a clear , inherent confl ict of interest ," Shi rema n sai d, accordi ng to the
accounts of several i n the r oom.
On t op of t hat inherent conf l ict, the r at ings agenc ies have been st r uggl i ng t o keep tabs on
industries t hat grew qui ckl y and adopted inc reasi ngly complex practices, Shi rema n sai d,
suggesti ng t hat t he r atings agencies l acked t he "firepower" to r egul at e t he financi al
market s .
In case anyone mi ssed it, Shi reman drove his poi nt home, point ing out t hat hi gher educat ion
acc rediti ng agencies are made up of (and f i na nci al ly supported by ) t hei r member col leges, and
see it as their mi ssion both to help the institutions "improve" and al so t o ensure, in what
i s essent ially a subcontract from t he f ederal gover nment, t hat t hey are of suf f icient
quali ty .
The peer r evi ew natu r e of hi gher educat i on accredi tat ion has an inher ent conf l ict of int erest
si mi l ar to t he r at ings agencies, Shirema n sai d. Gi ven that , he suggested, i t i s cruc ial fo r
state and f ederal agencies, as t he ot her two part s of the t r i ad, t o step up t hei r r ole i n
r egul ating hi gher education. But do state r egul at ors think t hey have t he "firepower" to keep
t abs on t he big, growing and complex pri vat e market col lege sector? Shi rema n as ked t he st ate
off ici als in t he r oom. The r espon se was underwhelming.
The f ederal gover nment's own powers may be i ns ufficient t o do t he job, too, Shi rema n
suggested, accordi ng to members of t he audience. That i s why t he department needs new
approaches t o ensuri ng i ntegr ity i n t he fi nanc i al ai d progr ams, he sai d, such as r equiring
most f or-profi t col leges and non-degree vocat ional progr ams at nonprofit col leges t o show
that t hey are preparing st udents f or gai nf ul employme nt.
Several peopl e who heard t he speech sai d t hey viewed it as a mu ch mor e strident cri t i que of
f or -profit colleges, and of hi gher educat ion accredi tation, t han Shirema n has del i vered
before. But Davi d Di es, who heads t he Wisconsi n Educati onal Approva l Board and just fini shed
a ter mas president of the nat i onal group of state r egul at ors , didn't hear i t qu ite t hat way.
"I t hi nk Bob was expl ai ni ng why we need state r egul ation and [Education] Department oversi ght
t o be part of t his t hree- legged stool, not j ust accreditat ion, and why we all need to work
t ogether ," sai d Dies. "He was pointi ng out some limitat i ons of accreditation, but I di dn't
really see it " as highly cr i tical of accreditors or for -prof it colleges .
Doug Leder man 1(_b_)(_6_) .com>
58
From:
Sent:
To:
Subject:
(b)(5)
Dannenberg, Mi chael
Friday, April 30, 201 0 10:30 AM
Shireman, Bob
GE msg
From: Dannenberg, Michael
To: Shireman, Bob
Sent : Thu Apr 29 14:25:422010
(b)(5)
From: Shireman, Bob
Sent: Thursday, April 29, 2010 1:34 AM
To: Dannenberg, Michael
Subject: FW: my speech
I'd welcome your perspective.
From: Shireman, Bob
Sent: Thursday, April 29, 2010 1:26 AM
To: Shireman, Bob; Kanter, Martha; Hamilton, Justin; Cunningham, Peter
Cc: Arsenault, l eigh
Subject: RE: my speech
The audio file can be downloaded from GoogleDocs:
http://docs.qoogle.com/leaf?id- OBxEeRDh60ka M2U2MGZkYWUtZmMOMyOONjJ jlTqxNGItN2E1OThhMmY20GU4&hl -en
(the ti le is too large to attach)
From: Shireman, Bob
Sent: Wednesday, April 28, 2010 10:13 PM
To: Kanter, Martha; Hamilton, Justin; Cunningham, Peter
Cc: Arsenault, leigh
Subject: my speech
54
I was speaking to state regulators of postsecondary institutions ( most of t he agencies focus on for-profit and non-
degree). http://www. nasasps.org/
For-profi t colleges were there, too, and I t hanked them for being responsi ve to the demand for educat ion and training. I
cited t heir increases in federal aid.
Using t he current events, I pointed out the parallels between accredit ing agencies and credit rating agencies ( responsible
for judging quality, but paid by those who are being j udged = inherent confl ict of interest ). I said t hat's why t he other
two parts of t he regulatory t riad (states and fed) need to be st rong.
I said nothi ng of Goldman Sachs.
I will t ry to send the audio fil e or post it on youtube or something.
-Bob
Robert Shireman
Deputy Undersecretary
U.S. Department of Education
(202) 260-010 1
55
From:
Sent:
To:
Subject:
Ralph Wolff (b)(6) wascsenior.org)
201 0 9:31 AM
Shireman, Bob
Re: Would you have time for a call?
Bob,
Great. Thi s i s not about new regulations but getting better posi tioned to deal wi t h fo r
prof it s . I wil l be at the airport but can cal l you at
2:45 Chicago t i me . Would that work ?
Ralph
Sent from my iPhone.
On May 5, at 7: 57 "Shi r eman, Bob" <Bob.Shi reman@ed, gov> wrote :
in Chicago and I amtraveling
available .
> Ral ph:
> Ni ce t o hear from you. We are now in a period when we are not all owed
> t o discuss the rulemaking. But I woul d be happy to di scuss ot her
> t opi cs if you want to give me a call at the number below at, say, 2:El0
> t oday (or give me your number wi t h t imes that work f or you ).
> - Bob
>
> Robert Shireman, Deputy Under secretary U. S. Department of Educat i on
> 400 Mar yland Ave ., S.W.
> Room 7E31El
> Washingt on, D.C . 20202
> ( 202) 260-0101
> Fax: 202-205-ElEl63
> bob. shi r eman@ed.gov
>
>
>
> - ----Or i gi nal Mes sage- - - - -
> From: Ralph Wolff [(b)(6) rwwascseni or . or gl
> Sent : Monday, May 03, 2Elle 3:35 PM
> To : Shi r ema n, Bob
> Subject : Would you have time for a cal l ?
>
> Bob,
>
> I r ead a transcri pt of your recent tal k about fo r pr ofit inst itutions ,
> and wo ul d wel come a behind the scenes conve rsation wi t h you about what
> you t hi nk we acc r editors shoul d be doing t hat we aren' t . We at WASC
> are deal ing with a growi ng number of f or profit institut ion s and
> seei ng a vari et y of approaches to f undi ng, governance, and delivery. I
> have some ideas t oo about what we might do.
>
> Any chance we coul d tal k thi s week?
> Mi nneapol is thi s week and have t i me
>
42
> Thanks .
>
> Ral ph
>
> Sent f r om my i Phone .
>
>
43
From:
Sent :
To:
Cc:
Subject:
Attachments:
Shi reman, Bob
Monday, May 17, 2010 9:09 PM
Viadeck, David
lucsikes@sbcglobal .net
RE: your pal Bob Shireman...
image001.gif; image005.gif ; image006.gif; image002.gif
(b)(6)
Shireman
Deputy Undersecretary
U.S. Department of Educat ion
(202)
-'
From: Vladeck, David [dvladeck@ftc.gov]
Sent: Monday, May 17, 2010 6:33 PM
To: Shireman, Bob
S bt ct F'N I B b Sh' U Ie

: your pa 0 Ireman... •
.. ,0. _H
(b)(6)
• .
(b)(6)
(b)(6)
David C. Vladeck
Director
Bureau of Consumer Protection
Federal Trade Commission
600 Pennsylvania Avenue, NW
Washington, DC 20580
(202) 326-2234
From: Poe K&collegeforward.orgl
Sent: Man ay, May 17, 2010 5:56 PM
To: Vladeck, David
c c: ((b)(6) f@col1egeforward.org
Subj ect: RE: your pal Bob Shireman...
Thanks - no pressure ei t her way, and no real hurry t o fi nd out.
BTW here' s a graph showing the spike in stock prices after the 3 PM art icle on Inside Higher Ed that broke t he news-
t hat 's Apollo Group (Univ of Phoeni x), DeVry, In Educati onal Services, and Corint hian Colleges. Prett y remarkable.
Symbol Last Trade
APOL 3:48 PM EDT 58,10
Change Volume Intraday
i"5.32 i"1(1.08% 6,289, 027 ../
DV 3:48PM EDT 61.97 i"2.8 \ i"4,75% 1,717, \ 15 _,_ "._."',_... "r
25
ESI 3:48PM EDT 110.16 1,71 8,473 _ , ,,_ '" _-,I:
COCO 3:48PM EDT 15.85 4,306,734
26
From:
Sent :
To:
Subject:
FYi
Shireman, Bob
Monday, May 10, 2010 1:26 PM
Gomez, Gabriella
FW: Hi mr secretary
From: Private - Duncan, Arne
sent: Monday, May 10, 2010 1:07 PM
To: Shireman, Bob
Subject: Fw: Hi mr secret ary
Fyi
From: Andrews, Rob[lb)(O)
To: Private - Duncan, Arne
Sent: Man May 10 10:48:02 2010
Subj ect: Hi mr secretary
Hope all is wel l. 1 would be happy to discuss the below at any time.
Thanks
Rob
Qualit y index
( I)Goal-Io assure that schools-i rrespect ive of ownership- offering career preparation educat ion are providi ng value added for
taxpayers
(2)Method- create an index as follows-
(A) weighted average factors
(I) Job placement in jobs paying at least 25th percentile of bls re ported income for that job in that region (50 pCI of score)
(Ii) Graduat ion from an accredited program (30 pet of score)
(Iii) Loan default rate (20 pet of score)
(B) multiplier to take into account effort 10 train those most in need- take percentage ofpel1 eligible students and add it to 1, so a
school with 38 percent pell eligible has a multiplier of 1.38. Mult iply the weighted average of the factors by the multiplier in order to
produce the quali ty index score.
(C) determi ning the success threshhold for the index- take the target return for taxpayers on aid dollars invested, and then determi ne
the score necessary to generate that return. This becomes the success threshhold.
(3) Consequences-schools failing to meet the threshhold would be required to develop and implement redmediat ion plans for a given
number of years. Schools chronically failing to meet the threshhold for a given number of years would lose title iv eligibility for the
program in question.
(4) Next steps-because this proposal is broader than the gainful employment rule's statutory authority, the proper procedure is to
withdraw the proposed rule, and determine whether statutory aut hority exists to adopt the quality index. If it docs not. we should work
30
on a legislative proposal to implement the plan. I believe it would enjoy bipartisan support. If this plan works, it frankl y accompl ished
all of the goals of the 90-1 0 rule, cohort loan default, and the proposed gainful employment.
I would be happy to discuss further at any time.
Thanks
Rob
Andrews
Sent using BlackBerry
31
From:
Sent:
To:
Subject :
Shireman, Bob
Friday, June 18, 2010 5:1 3 PM
Shedd, Jessica; Weko, Tom; Bergeron, David; Miller, Elise
RE: debt to income ratio spreadsheets
I know him but I ran'r i m
(b)(5)
(b)(5)
-- - - -Ori ginal Message - - - --
Fr om: Shedd, Jessi ca
Sent : Friday, June 18, 2010 4: 20 PM
To: Weko, Tom; Berger on, David; Shi r eman, Bob; Miller, El i se
Subject : FW: debt to income r at i o s preadsheets
Bob & Davi d,
Is t his someone you have been wor king wit h? I'm not s ur e how he got my name.
Jessica
--- - -Or i gi nal Me ssage- ----
Fr om: Kantrowitz, Mark ( mai t o: ar . antrowitz@1ons er .com
Sent: Friday, June 18, 2010 4:09 PM
To : Shedd, Jessica
Subject : debt to income rat io spreads heet s
(an you send me copies of t he spreadsheet s us ed t o eval uate the impact of t he proposed 8%
debt servi ce to income t hreshol d on propri et a ry i nst itutions ? I' m part icularly i nterested i n
t he analysi s i nvolvi ng median debt and mapping from ( PI /SOC codes t o income, as well as
anyt hi ng r el at ed to t he gai nful employment proposals .
Thanks,
Ma rk
----------- -------------- -------------- -----------
Mark Kantrowitz
Publi sher of Fi nAid.or g and FastWeb. com
Aut hor , FastWeb Col lege Gol d
FinAid Page LLC
PO Box 2056
Cranber ry Township, PA 16066-1856
Tel : 1-724- 538-4500
Fax · 1 - 7 24_S3B_dSA2
r
NOTI CE :
Thi s message, and any at tachment s, cont ai n(s) information t hat may be confi dential or
protected by pr ivi lege from di scl osur e and is int ended onl y for t he i ndivi dual or ent i ty
named above . No one else may di scl ose, copy, di st r ibut e or use the content s of t his message
for any purpose. Its unauthori zed use, di sseminat i on or dupl i cat i on i s st r i ct l y prohibit ed
8
and may be unl awful . I f you receive t his message i n error or you ot her wise are not an
aut hor i zed recipi ent , please i mmediately delete the mes sage and any at tachments and not i f y
t he sender.
9
From:
Sent:
To:
Cc:
Subj ect:
Kanter. Martha
Thursday, May 06,20109:55 PM
Rogers, Margot; Miller. Tony; Cunningham. Peter; Rose, Char1ie; Yuan, Georgia; Martin,
Carmel; Gomez, Gabriella
Hamilton, Justin
FYI: CCA astoturfing opposition to defining gainful employment

From: Paul ine Abernathy [pabernat hy@ticas . org]
Sent: Wed nesday, May 05, 2010 12:14 PM
To : Ma nhei rner , Ann; Ar senaul t , l ei gh; Gomez, Ga briel la; Sh i r ema n, Bob; Kvaal , James R. ;
Pl otkin, Hal ; Kanter, Mart ha; Madzelan, Dan
Cc : Laur en Asher; Debbi e Fr ankI e Coc hr ane
Subject : CCA ast ot urfi ng opposi t ion to defini ng gai nf ul employment
The stri ng below reveals t hat CCA has set up a web site and i s ur ging its members to have
st udent s sign a petition t o "r ej ect the De par tment of Education' s defi ni tion of Gai nf ul
Employment." The fact that CCA is not even wait ing to see what the Administration pr oposes
at a mini mum raises questions about CCA' s interest in any defi nition of gainful employment .
A student petition rejecting ED' s [ currently nonexistent] definition of gainful empl oyment .
http: / /www. studentsforacademi cchoi ces.org/index.cfm?page-3
A search reveals a few school s t hat are directing st udent s t o the sit e . Example:
http : / /communi ty . globeuni ver si ty.edu/online/?p: 1266
Thi s appears to be i n r esponse t o thi s not ice by Students for Academi c Choice . Questions are
to be di r ect ed to Bruce l eftwich, Senior Vice President of l egi sl at i on at CCA.
ht t p: / / commu nity. gl obeuni ver sit y. edu/ Elk· Ri ve r / ?p=84
Pauline Abernathy
Vice President
The I nstitute for College Access &Success www.ticas . org and www .projectonstudentdebt . org We
moved! TICAS' main number i s now 510.318.7900. My di r ect l i ne is 518. 318. 7903 .
37
From:
Sent :
To:
Subject :
Bergeron, David
Tuesday, June 15, 2010 12:10 PM
Arsenault, Leigh
Re: 2 page summary and reg
Thanks! And it was unusual as I've only seen immatures in MT and MNbefore...
David A. Bergeron
Sent using BlackBerry
From: Arsenault, Leigh
To: Bergeron, David
sent : Tue Jun 15 10:53:55 2010
Subject: RE: 2 page summary and reg
Thanks David.
Great job with the briefing. And a yearling eagle, that doesn' t happen often in oc..
From: Bergeron, David
Sent : Tuesday, June IS, 2010 11:51 AM
To: Arsenault, Leigh; Madzelan, Dan; Shireman, Bob
Cc: Yuan, Georgia; McFadden, Elizabeth; Hamilton, Justin
Subject: RE: 2 page summary and reg
Here is t he summary from t he press rel ease.
The issues covered in this NPRM ar e t he following:
Ensu r ing t ha t only eligible s t udents receive federal fu nds. Generally students are eligible for aid only
if they have a high school diploma or pass an "ability t o benefi t" test, and only if their academic standing
is sat isfact ory. The NPRM proposes some cla rifica tions:
• High School Dipl oma: The proliferat ion of hi gh school diploma mills has call ed t he validity of some
secondary school credent ials into quest ion. The proposed regulati ons would require inst it uti ons to
develop and foll ow procedures to evaluate the validity of a st udent's hi gh school di ploma if t he
institution or the Secretary has reason t o believe that t he dipl oma is not valid or was not obtai ned
from an entity that provides secondary school educati on.
• Coll ege Credits : The proposed regulations wo uld extend eligibili ty for federal st udent aid t o st udents
without hi gh school d iplomas after t hey successfully co mplete six cred its of college work. This
implements a provis ion that was included in t he Hi gher Education Opportunity Act of2008.
• Ability To Benefi t: The De partment is responsible for approving test mat erials developed by test ing
co mpanies. The Government Acco untability Offi ce recommended a number of ways that the
Department could improve its oversight of how ATB t ests are approved and admi nistered. The NPRM
foll ows up on those recommendations.
11
• Satisfactory Acade mic progress: Every institut ion is required to have satisfactory academic progress
policies. Audits and institutional program revi ews have uncovered policies that meet the cur rent
regulatory standards but permit students to receive fu nds even though they may not be meeting the
institution's progress standards. The proposed regulations would require a structured and consistent
approach to evaluating a student's academic work, while continuing to provide fl exibility to
institutions in establishing their policies.
• Verifica tion: Each year, a number of students are required to confi r m the information on their Free
Appli cation for Federal Student Aid (FAFSA). Due to changes in the law and a new data retrieval
process with the Internal Revenue Service, th e proposed changes would, in many cases, reduce the
amount of information students would have to provide to institutions.
Protect ing consumers from misleading or overly aggressive recruiting practices, and clarifying
State oversight responsibiliti es. The NPRM strengthens three cur rent rules that are designed to
protect students and taxpayers:
• MisrepresentatiQn: During public hearings and negoti ated rule maki ng sessions, the Department
heard numerous complaints from stude nt s enroll ed in programs where they felt mi sled on what was
and was not being offered, the way progra ms could be paid for, and thei r job prospects upon
completion. To protect consumers, the proposed regulations strengthen the Department's authority
to take action against insti tutions engaging in deceptive advertising, marketing, and sales practices.
• Incentive Compensation: The Department heard reports of aggressive recruiting practices resul ting in
students being encouraged to take out loans they could not affo rd, or enroll in programs where they
we re either unquali fi ed or could not succeed. Though current laws prohibit schools from
compensating admissions recrui ters based solely on success in securing student enroll ment,
regulations known as "safe harbors" allowed thi s practice to go on under certa in circumstances,
which we believe violate the spirit of the law. The proposed regulations will re move all the "safe
harbor" provisions.
• State Authorization: State authorization is required by the Higher Education Act for a postsecondary
inst itution to participate in federal student aid, and other federal funding programs. Some states have
fa iled to establish how they approve and monitor post seconda ry programs. The proposed regulations
would cl arify thi s important State responsibility.
Clari fying the courses that are eligibl e for fede ral a id, and the amount of aid that is appropriate.
• Credit Hour: Credit hours are the metric used by the Department to measure eligibility for federal
funding. Currently there is no standard defi nition for a credit hour, which has led to reports of
inst itutions awarding more credits (and drawing down more federal fu nds) than are deserved. To
address this issue, the regulation defi nes a credit hour and establishes procedures for accredi ting
agencies to deter mine whether an institution's assignment of a credit hour is acceptable. Recognizing
that "seat time" is not the goal, the proposal all ows for equivalent meas urement of learning outcomes.
• Written A,2rgements: A postsecondary institution is all owed to delive r a porti on of another
institution's educational program through a wri tte n arrangement. Problems have surfaced when the
two inst itutions are controlled by the sa me entity or do not meet certain participation requirements.
The proposed regulations limit the amount of a progra m that can be provided by a school in an
12
arra ngement and prohi bit arrangements between ineligible insti tutions that have had their Federal
student aid participation revoked.
• Retakin2 Coursework: Curre ntly students who repeat coursewor k cannot have the course they
repeat count towards the calculation of a full-time course load. The proposed regul ati ons would
expand the definition of fu ll -time student by allowing such courses to count if the student is in a
program that registers by the termor semester.
• Determinin2 When a Student Has Withdrawn: Currently, loopholes complicate the measure of how
much federal funding must be paid back if a student who drops out of a program. The proposed
regulations would eli minate loopholes and cl arify the calculation of returning federal funds to the
Department by defini ng when a student is considered to have wit hdrawn from a program. It will also
cl arify the circumstances under which an institution is required to take atte ndance for the purpose of
calculating a return of federal funds.
• llisbursing Federal Student Aid Funds: As it stands now, students are not receiving their Federal
student aid funds in enough t ime to obtain their books and before the start of school. The proposed
regulations woul d ensure that the neediest recipients can acquire books and supplies by the seventh
day of their payment period.
• Disclosures regarding Gainful Employment: The Department is proposing that career college and
t raining programs at publi c, private nonprofit, and fo r-profi t institutions provide prospective
students with the program' s graduation and job placement rates, and that colleges provide the
Department with infor mation that will all ow determination of st udent debt levels and incomes after
program complet ion. The Department is still developing metrics to hold programs accountable for
meeting federa l requirements. Aseparate NPRM on this topic will be publi shed later in the summer.
From: Arsenault, Leigh
Sent: Tuesday, June 15, 2010 11:44 AM
To: Madzelan, Dan; Shireman, Bob; Bergeron, David
Subj ect: FW: 2 page summary and reg
Justin is asking for a 2-page summary taken from t he preamble. Does t his ring a bell and is t here somethi ng I can do t o
help pull thi s t ogether? Thanks.
Leigh
From: Yuan, Georgia
Sent: Tuesday, June 15, 2010 11:21 AM
To: McFadden, Elizabeth; Hamilton, Just in; Arsenault, Leigh; Madzelan, Dan
Subject: Re: 2 page summary and reg
David and 1are on the hill all day. Bob is at a graduation. I believe that Bob and David were going to do a 2-pager taken
from the preamble.
Leigh can you and Dan figure oul how to gel this done asap?
Thx. Georgia
From: McFadden, Elizabeth
To: Hamilton, Justi n; Yuan, Georgia
Sent : Tue Jun 15 10:12:53 2010
Subject: RE: 2 page summary and reg
13
I think that is something OPE would prepare. Have you checked with them?
From: Hamilton, Justin
sent: Tuesday, June 15, 2010 11:10 AM
To: McFadden, Elizabeth; Yuan, Georgia
Subject: Re: 2 page summary and reg
And that it would summarize the narrative section
On 6/15/10 10:59 AM, "McFadden, Elizabeth" <Elizabeth.McFadden@ed.gov> wrote:
I haven't see a 2-page summary.
From: Hamilton, Justin
sent: Tuesday, June 15, 2010 11:02 AM
To: McFadden, Eli zabeth; Yuan, Georgia
Subject: 2 page summary and reg
Can you guys give me the two page summary as well?
14
From:
Sent:
To:
Subject:
Correct
Sent using BlackBerry
Kvaal, James
Thursday, July 22,2010 7:51 PM
'pabernathy@ticas.O'g'
Re: Press release issue
From: Pauline Abernathy <pabernathy@ticas.org>
To: Kvaal, James
Sent: Thu Jul 22 17: 21: 37 2010
SUbject: Press rel ease issue
The first line says it appl ies to for-profits but it appl ies to all programs subject to GE, right? That
includes nonprofits and publics incl uding most CCs!
Paul ine Abernathy
Vice President
The Institute for College Access & Success
www.ticas.orq and
TICAS: 510.318.7900 Direct: 510.31 8.7903
1
From:
Sent:
To:
Subject:
Kvaal , James
Thursday, July 22, 2010 10:38 AM
'pabernalhy@ticas.org'
Re: Warning language
Thanks
--------------------
Sent using BlackBerry
From: Pauline Abernathy <pabemathy@ticas. org>
To: Kvaal, James
Senl: Thu lui 2209:29:31 2010
Subject: RE: Warning language
I know. Just resent wit h complete message!
From: Kvaal, James [mailto:James.Kvaal@ed.govl
Sent: Thursday, July 22, 2010 10:29 AM
To: Pauline Abernathy
Subject: RE: Warning language
Didn't get thi s all
From: Pauline Abernathy [mailto:oabernathy@ticas.org)
Sent: Thursday, July 22,2010 10:23 AM
To: Kvaal, James
Subject: Warning language
---------- -
The April 12 letter to Tony Miller from Ka
Pauline Abernathy
Vice President
The Institute for College Access & Success
lNWW.ticas.org and www.R[Qjectonstudentdebt.org
TICAS: 51 0.31 8.7900 Direct: 510.31 8.7903
2
From:
Sent:
To:
Subject:
Kvael. James
Monday, July 19, 2010 11:06 AM
Nassinan, Barmak
RE: Write-up
There is information in thi s paper that is not accurate.
From: Nassirtan, Barmak[mailto;barmak@aacrao.orgl
Sent: Monday, July 19, 2010 10:47 AM
To: Kvaal, James
Subject: Write-up
3
From:
Sent:
To:
Subject:
Importance:
l et' s discuss
Kvaat, James
Monday. July 19, 2010 10:09 AM
Martin, Phil
FW: i know you cannot respond
High
From: Bergeron, David
Sent: Monday, July 19, 2010 10:06 AM
To: Kvaal, James; Yuan, Georgi a
Subject: FW: i know you cannot respond
Importance: High
From: Eisman, Steven f mailto: seisman@fpoartoers.com}
Sent: Monday, July 19, 2010 9:45 AM
To: Bergeron, David
Subject: i know you cannot respond
But just fyi. Education stocks are running because people are hearing DOE is backing down on gainful employment.
Steven Eisman
FrontPoint Financial Services Fund
seisman@fppartners.com
91 7-934- 1770
4
From:
Sent:
To:
Cc:
Subject :
Pauli ne Abernathy [pabernathy@ticas.org}
Monday. July 19. 20109:05 AM
Kvaat, James; Hamilton, Justin
Lauren Asher ; Jennifer Webber
FW: Would NBC News have BP sponsor a show on oil drilling with Tony Hayward on a panel ?
Heads up- NBC will be called out on this and Secy Duncan is listed as a speaker.
From: Pauline Abernathy
Sent : Monday, July 19, 2010 9:01 AM
To:
Subject: Would NBC News have BP sponsor a show on oil drilling with Tony Hayward on a panel?
The University of Phoenix is sponsoring NBC News' week-long
series of events on education issues, incl uding a summit that the
Univ of Phoenix president will speak at!
NBC News to Hold Education Summit
NBC News today announced "Education Nation," a week of events in September that will bring
together leaders from poli tics, all levels of education and policy experts, focused on a two-day summit
at Rockefeller Plaza. Attendees are expected to include U.S. Secretary of Education Ame Duncan,
New York City Mayor Michael Bloomberg, Delaware Gov. Jack Markell, Minnesota Gov. Tim
Pawl enty, and AI Sharpton. Universi ty presidents who will be parti cipating incl ude Susan Hockfi eld,
president of the Massachusetts Institute of Technol ogy, and Bill Pepicell o, president of Univer sity of
Phoenix. Several hundred people -- includi ng students and parents -- are expected at the summit.
Content from the summit and speci al stories on education issues will be featured on "NBC Nightly
News," "Today," "Meet the Press," "Your Business," MSNBC, CNBC, Telemundo, msnbc.com and
nbclearn.com. NBC announced that the effort is also being supported by the Bill & Melinda Gates
Foundation, t he Universi ty of Phoenix, t he Eli and Edythe Broad Foundation, American Express,
Raythecn, Tishman Speyer and Scholastic.
From !J!!p:/Iwww.insidehighered.comlnewsI20101071191gt#232687
Pauline Abernathy
Vice President
The Institute for College Access & Success
www.ticas.org and www.lllQjectonstudentdebt.orq
TICAS: 510.318.7900 Direct: 510.318.7903
5
From:
Sent:
To:
Subject :
Kvaal, James
Wednesday, July 07, 201 0 12:46 PM
Mayes, Edgar
RE: heads up
Edgar have we gotten a lot of these?
From: Winters, Deborah
Sent : Tuesday, June 22, 2010 5:26 PM
To: Mayes, Edgar; Kvaal, James
Subj ect: RE: heads up
Thanks Edgar! James- can you please forward the new address to whoever needsit?
From: Mayes, Edgar
Sent : Tuesday, June 22, 2010 5:24 PM
To: Kvaal, James; Winters, Deborah
Subject: RE: heads up
The e-mail address for the gainful employment write-in-campaign has been set-up. The address is
ame.duncall.gainful.@ed.gov.
It will be activated, tomorrow.
Thanks,
Edgar
- -------------
From: Kvaal, James
Sent: Friday, June 18, 2010 6:42 PM
To: Winters, Deborah
Cc: Mayes, Edgar
Subject: RE: heads up
They say they would be happy t o use adist inct address, or a subject line that would allow easy sorting. Would it be
easier if I got out of the middle?The contact is Pauline Abernat hy at TICAS, pabernat hy@ticas.org.
Thanks again
From: Winters, Deborah
Sent : Friday, June 18, 2010 2:54 PM
To: Kvaal, James
Cc: Mayes, Edgar
Subject: FW: heads up
Hi James- welcome back! Teresa asked me t o work with you on your quest ion about t he gai nful employment
regulations e-mails. The best way t o handle t his from our point of view would be to have t hem send their e-maits not to
t he public addressbut to a unique e-mai l address that we will set up. Would that work?
6
From: Kvaal, James
sent: Friday, June 18, 2010 1:52 PM
To: Garl and, Teresa; Mayes, Edgar; Shireman, Bob
Subject: heads up
Teresa and Edgar,
I understand that an out side group may be generat ing emails supporting t he Department' s gainf ul employment
regulat ions to the public Arne Duncan address. It' s possi ble t hat there will be t housands of them.
I want ed to let you know t his is coming. If t here is a better way for t hem t o del iver this message, I would be happy t o
make a suggest ion t o t hem - of course no guarantee t hey will accept it.
Thanks
James
7
From:
Sent:
To:
Cc:
Subject:
Vladeck, David [dvladeck@ftc.gov]
Tuesday, June 29, 201 09:00 AM
Shireman, Bob
Kanter, Martha; Kvaat, James; Harwood, Charles A.
RE: GI Bill Web site
We ' l l t ake a l ook at i t asap and r eport back. Hope al l i s we l l . Davi d
David C. Vladec k
Director
Bureau of Consume r Protection
Feder al Tr ade Commiss ion
600 Pennsyl vania Avenue, NW
Was hi ngton, DC 29589
(202) 326-2234
- ----Ori ginal Message-----
From: Shi rema n, Bob Imailt o: Bob. Sh i r eman@e d.govl
Sent: Tuesday, June 29, 2919 8: 98 AM
To: Vladec k, Davi d
Cc: Kant er, Ma r t ha; Kvaal, James
Subject : FW: GI Bil l Web si t e
Davi d:
Might t he FTC consi der t aking a qui ck l ook at thi s deceptive we b site? I'm copyi ng our Under
Secretary, Ma rt ha Kanter , and my r epl acement as deput y, James Kvaal .
- Bob
Robert Shi rema n
Deput y Under secretary
U. S. Department of Education
( 202) 260- 0101
Subject: GI Bill Web si t e
htt p: / / www. gi bill . coml
Looks li ke a govt si t e but i t' s act ually a for -pr of it col l ege s i t e.
Matthew Dembi cki , Edi t or , Community College Ti mes <ht t p: / / www. commun itycolleget imes . com/ >
American Association of Communi ty Colleges<ht t p: / /www.aacc.nche.edu/>
292-728-9288, ext. 296
Follow AACC on Twi t t er<ht tp : / / t wit t er . com/Comm Col lege> ,
Facebook<ht t p: / / www.facebook. com/ CommCollege >.
Fli ckr <http : / / www. fl i ckr. com/photos/ communit ycollegesI > and
YouTube<ht tp : / /www. yout ube . com/ Communi t yColleges >
Th i s emai l has been scanned f or all viruses by the MessageLabs Emai l Security System.
10
From:
Sent:
To:
Subject:
19:99 a .m. i s fine.
Howard. Pat
Monday, June 28. 2010 7:52 AM
Shireman, Bob
RE: GE
---- · Or i gi nal Message---- -
From: Shi r eman, Bob
Sent: Sunday, June 27, 2919 11: 33 AM
To: Howard, Pat
Subject : RE : GE
Can we do 19 a , m. t omor r ow (st i l l Monday) instead?
From: Howard, Pat
Sent : Thur sday, June 24, 2910 5: 13 PM
To: Shi r eman, Bob
Subject : RE : GE
Bob, Monday at 3:90 i s fine. I am in PCP Room 8125,
will be probably myself and two ot her s f r om the OI G.
l ook f orwar d to talking wi t h you.
Pat
--- - -Original Mes sage- - - - -
From: Shi r eman, Bob
Sent : Thur sday, June 24, 2919 4: 38 PM
To : Howar d, Pat
Subj ect : RE : GE
my of f ice number i s 292-245-6949. Ther e
I will send an invit e through Out look.
Let ' s t ry 3:99 on Monday, at your office si nce I may need
whether I'm stil l home waiti ng f or a shi ppi ng cont ai ner ) .
---- -Or i gi nal Message- - - - -
From: Howard, Pat
Sent : Thur sday, June 24, 2019 4: 32 PM
To: Shireman, Bob
Subject : RE : GE
t o do i t by phone (dependi ng on
l et me know where to go/ cal l.
Sorry I di d not get back to you sooner, was at t he Senat e HELP hearing and then at our Annual
OIG Awards Cer emony . We are open t omor row af t ernoon or anytime Monday.
Pat
-----Or i gi nal Mes sage-- - - -
From: Shi r eman, Bob
Sent ; Thursday, June 24, 2019 9:45 AM
To: Howard, Pat
Subj ect : RE : GE
Might t hi s after noon wor k? I 'm open between 2 and $ .
11
-- - - -Original Message---- -
Fr om: Howard, Pat
Sent : Wednesday, June 23, 2010 5:41 PM
To: Shireman, Bob
Subj ect : RE : GE
Bob,
We are very interested i n briefing.
Vi erling, and possi bl y Bill Hamel.
schedules for us .
Thanks - Pat
Myself, Mary Mit chelson, Howar d Sorensen, Chris
I f you want to propose a time &pace I will check
--- - -Or i gi nal Me ssage-- - - -
From: Shi reman, Bob
Sent : Wednesday, June 23, 2010 4: 51 PM
To: Howar d, Pat
Subject : GE
Pat :
I ' d l i ke to give your office a briefing on where we are headed wi t h the gai nful empl oyment
NPRM. Who shoul d I set up a meeting with?
- Bob
12
From:
Sent:
To:
Cc:
Subject:
Kvaal, James
Friday, June 18, 2010 6:42 PM
Winters, Deborah
Mayes, Edgar
RE: heads up
They say they would be happy to use a dist i nct address, or a subject li ne t hat woul d allow easy sorting. Would it be
easier if I got out of the middle? The contact is Pauline Abernat hy at TICAS, pabernathy@ti cas.org.
Thanks again
From: Winters, Deborah
Sent: Friday, June 18, 2010 2:54 PM
To: Kvaal, James
Cc: Mayes, Edgar
Subject: FW: heads up
Hi James - welcome back! Teresa asked me t o work wit h yo u on your quest ion about the gainful employment
regulat ions e-malts. The best way to handle thi s from ou r poi nt of view wou ld be t o have them send their e- malts not t o
the public address but to a unique e-mail address that we will set up. Would that work?
From: Kvaal , James
Sent: Friday, June 18, 2010 1:52 PM
To: Garland, Teresa; Mayes, Edgar; Shireman, Bob
Subject: heads up
Teresa and Edgar,
I understand that an out side group may be generating emails support i ng the Department' s gainf ul employment
regulati ons to the publi c Arne Duncan address. It' s possibl e that there will be thousands of them.
I wanted t o let you know t his is coming. If there is a better way for t hem t o deliver t his message, I would be happy to
make a suggest ion t o t hem - of course no guarantee they will accept it .
Thanks
James
13
From:
Sent:
To:
Cc:
Subj ect:
Pauline Abernathy [pabemathy@ticas.org)
Thursday. May 27. 2010 4:06 PM
Kvaal, James R.; McGuire, MaryEllen C.; Gordon, Robert M.; Shireman. Bob; Arsenault,
Leigh; Gomez, Gabriella; Cecilia_Rouse@who.eop.gov; Kanter. Martha; Yuan. Georgia;
Manhelmer , Ann
Lauren Asher; Connie Myers
FW: Dear Coll eague: NAACP. National Council of La Raza and 30'" Orgs Support
Administration's Efforts to Protect Students and Taxpayers
FYI · Below is a Dear Colleague from Reps. Polis and Grijalva to all House members sharing the
leUer to Secretary Duncan from more than 30 organizations in support of strong and
effective regulat ions on gainful employment and incenti ve compensation.
Pauline Abernathy
Vice President
The Institute for College Access & Success
www.ticas.org and www.projectonstudentdebt.org
We moved! TI CAS' mai n number is now 510.31 8.7900. My di rect line is 510.318.7903.
From: e-Dear Colleague
sent: Thursday, May 27, 2010 3:34 PM
To: E-DEARCOLL_ISSUES_A· F_OOOO@ls2.house.gov
Subject: CivilRights, ConsumerAffairs, Education: Dear Colleague: NAACP, National Council of La Raza and 30+ Orgs
Support Administ ration's Efforts to Protect St udents and Taxpayers
NAACP, National Council of La Raza and 30+ Orgs
Support Administration's Efforts to Protect
Students and Taxpayers
From: The Honorable J ared Polis
Sent By: §piros.Protopsaltis@mail.house.gov
Date: 5/27/2010
NAACP, National Council of La Raza and 30+ Organizations Suppor t Department of
Education's Efforts to Protect Students and Taxpayers
Dear Colleagu e,
We would like to bring to your attention a letter thai was sent to the Secretary of Education Arne Duncan last
week in support of the Department' s efforts to make its regul ations more consistent with the program integrit y
provisions in Title IV of the Higher Education Act and to protect students and taxpayers. This letter was signed
by more than 30 education, student, consumer protection and civil right s groups, including the NAACP,
11
National Counci l of La Raza, American Association of Collegiate Registrars and Admissions Officers,
Ameri can Association of University Women, American Federation ofTeachers, American Medical Student
Association, Campus Progress Action, Center for Law and Social Policy, Instit ute for College Access &
Success and its Project on Student Debt, National Association for College Admi ssion Counseling. National
Associ ation of Consumer Bankruptcy Attorneys, National Consumer Law Center, Consumers League, U.S.
PIRG, and the United States Student Association. The letter can be found at
h!!.Wrojectonstudentdebt.orgl fi leslpublNeg reg coalition support letter to Duncan.I2M
Thi s Congress passed and President Obama signed into law historic legislation that made the single largest
investment in college fi nancial aid ever by transforming the system to serve the needs of students, not banks or
big corporations. As we work on education issues in the I I I th Congress, we look forward to making further
progress on expanding college access and success, curbing federal student loan abuse, and safeguarding
taxpayer doll ars. If you have questions or need more information, please contact
fuJiros.Protopsaltis@mail. house.govat 5-2161 (Polis' otlice) or Joseph.Mai s@mail.house.gov at 5-2435
(Grijalva' s office).
Sincerely,
Jared Polis
Member of Congress
Raul M. Grijalva
Member of Congress
May 20, 2010
The Honorable Arne Duncan
Secretary of Education
U.S. Department of Educat ion
400 Maryland Avenue, SW
Washington, DC 20202
Dear Secretary Duncan:
As organizations representing students, higher education, consumers and civil right s, we write to express our
support for the Department of Education's efforts to make its regulations more consistent with the program
integrity provisions in Titl e IV of the Higher Education Aet. In particular, we urge you to propose regulations
on incentive compensation and gainful employment that will more effectively protect students from high-
pressure and deceptive sales tactics for educational programs of little or no benefit to them, and will ensure that
taxpayer dollars do not subsidize such practices and programs.
To protect both students and taxpayers, federallaw prohibits "any commission, bonus. or other incentive
payment based directly or indirectly on success in securing enrollment s or fi nancial aid," and requires
vocati onal programs and nearly all programs at for-profi t institutions to "prepare students for gainful
employment in a recognized occupation." Yet. examples of overly aggressive recruiting are plentiful. Some for-
profit institutions recently made headlines by targeting homeless shelters in their recruitment efforts. Another
for-profit institution paid $78.5 million to settle a whistleblower False Claim Act lawsuit and another $9.8
million to the Department of Education to resolve claims that it was paying improper incentive compensation to
its recruiters. Yet another large for-profit insti tution paid 56.5 million to settl e a lawsuit brought by the
California Attorney General charging "a persistent pattern of unlawful conduct." incl uding the infl ation ofjob
placement and starting salary information in order to recruit students to enroll in costly vocational programs,
and falsifi cation of records provided to the government .
22
While most schools may not engage in such practi ces, federal data suggest these are not isolated incidents.
Students at for-profit schools are the most likely to borrow and borrow the most. According to the most recent
federal data, one in five for-profit school students default on their fcderalloans. A full 44% of all defaulters
attended for-profit institutions, even though j ust 7% of all students attend for-profi t schools. Low-income, first-
generation and minority students attend for-profit institutions at disproportionate rates, making them
particularly vulnerable to illegal or unscrupulous acts by these schools.
Incentive Compensation. In direct confl ict with federal law prohibiting institutions of higher education from
providing "any commission, bonus, or other incenti ve payment based directly or indirectl y on success in
securing enrollments or financial aid," current regulations permit incentive payments that are not "based solely"
on the number of students recruited, admitted, enrolled or awarded fi nancial aid. Some schools have
aggressively exploited this and other loopholes in the current regulati ons to do just what the statute is intended
to prohibit. Consistent with the Department' s proposals during the negotiated rulemaking process, the proposed
new regulations should conform to the law and prohibit any empl oyee or contractor compensation "based
directly or indirectly" on successfully securing student enrollments or aid. To avoid ereating additional
loopholes, it is important that the prohibiti on include compensation based directl y or indirectly on applications
or enrollment up to and including completion, as well as payments for prospective student contact information.
Gainful Employment. Each year, students borrow and taxpayers spend billions ofdollars to subsidize
attendance at programs required to "prepare students for gainful empl oyment in a recogni zed occupation: ' Yet,
the Department' s current regulations include no official definition of "gainful employment." We urge you to
develop regulations that define gainful employment in a way that is measurable, enforceable, not overl y
burdensome to schools, and is aligned with the following principles:
• Include all debt incur red at any affiliated school. All debt incurred at a school under the same control
structure must be included in any measure of gainful employment that considers debt. Otherwise,
schools controlled by the same company could simply move students from one school or program to
another. Excluding debt from unaffiliated schools also has the benefit of allowing low-cost schools to
enroll and graduate students with high debt from unaffi liated schools without fear of penalty.
• Include all private loans known to the school and its affil iatcs. Debt-related measures of gainful
employment must include all pri vate loans that should be known to the school. Excluding private loans
would create a perverse incentive for schools to promote risky private loans before students have
exhausted their safer federal loan options. Pri vate loans that should be known to the school must include
all credit provided by any school under the same control structure as well as any loans provided by
lenders with which the school has a preferred lender arrangement.
• Avoid loopholes for programs with both high student bor rowing and low complet ion rates. A low
completion rate is one of the ways schools can fail to prepare students for gainful employment. Students
who borrow but do not complete are oftcn left carryi ng substantial debt without the increased earning
power that should come from a completed degree or certi ficate. The definiti on of gainful empl oyment
should not create a loophole for schools to discourage completion by students they consider likely to
have trouble repaying their loans.
• Use onl y data that are accurate and consistent acr oss colleges and progr ams, Existing requirements
for the calculation and reporting of completion and placement rates are not suffi cient for use in any
success-based measure of gainful employment. Accrediting agency requirements vary widely and allow
for substantial variation in the calculation of rates, and some schools have been found to have falsified
and manipul ated their placement data. It is therefore essential that the data and reporting standards arc
clear, consistent and independently verified.
Again. we applaud your initiative in revi ewing the Department' s current program integrity regulations to ensure
their consistency with federal law and to protect both students and taxpayers. We support your efforts and stand
ready to assist you in improving the Departments regul ations.
23
Sincerely,
American Association of Collegiate Registrars and Admi ssions Officers
American Association of University Women
American Federation of Teachers
American Medical Student Association
California Community College Student Financial Aid Administrators Association
California Tomorrow
Campaign for College Affordability
Campus Progress Action
Center for Law and Social Poli cy
Community College League of Cali fornia
Consumer Action
Consumer Federation of California
Cri ttenton Women's Union
Demos: A Network for Ideas & Action
Empi re Justice Center
Florida State College at Jacksonville
Greater Boston Interfaith Organization
The Greenlining Institute
The Institute for College Access & Success and its Project on Student Debt
NAACP
National Association for College Admission Counsel ing
National Association of Consumer Bankruptcy Attorneys
National Center for Publi c Poli cy and Higher Education
National Consumer Law Center (on behal f of its low-income clients)
National Consumers League
National Council of La Raza
Neighborhood Economic Development Advocacy Project (NEDAP)
New York Community College Association of Presidents
Public Advocates Inc.
Public Higher Education Network of Massachusetts
Rainbow PUSH Coalition
Student Senate for California Community Colleges
U.S. PIRG
United States Student Association
Visit the e-Dear Colleague Service to manage your subscription to the available Issue and Party list(s).
24
From:
Sent:
To:
Subject:
Attachments:
Shireman. Bob
Tuesday, May25. 2010 5:42 PM
Kanter, Martha
FW: Higher Learning Commission Final Report
x13jOOO3(1 J.pdf
Thi s i s OIG' s f inal r epor t on the i ssue of credi t hour s and t he accredi tat i on of Ameri can
Int ercontinent al University by North Central .
-- - --Or i ginal Message- -- - -
From: Vi er ling, Chri s
Sent: Tuesday, May 25, 2010 5: 06 PM
To: Shi r eman, Bob; Manheimer, Ann
Subject : Hi gher l earning Commission Fi nal Report
Thi s report went l i ve at 5: 00 t hi s eveni ng. I t hi nk t hat t here wi l l be a l ot of buzz
t his one. I t i ncl udes i nf or mati on on the accredi t at i on of Ameri can Int ercont i nent al.
school wi t h the Aler t Memorandum.
29
around
The
From:
Sent :
To:
Subject :
Pauline Abernathy [pabernathy@ticas.org]
Saturday, May 22,201010:34 AM
Shireman, Bob
Fw: For-profits on Face tomorrow?
----- Ori ginal Message -----
From: Pauline Abernathy
To; 'Ieigh.arsenauh@ed.gov' <Ieigh.arsenault@ed.gov>; 'rshireman@ticas.org'<rshireman@ticas.org>;
'James_R._Kvaal@wbo.eop.gov' <James_R._Kvaal@who.eop.gov>
Cc: Lauren Asher
Sent: Sal May 22 07:31:57 20I0
Subject: For-profi ts on Face tomorrow'!
Sestak and lamar alexander are both cca advocates. Does gibbs have Ips on ge in case it comes up tomorrow'!
-Face the Nation': White House Press Secretary Robert Gibbs; Sen. Lamar Alexander (R·TN); U.S. Senate candidate Rep. Joe Sestak
(D-PA)
30
From:
Sent :
To:
Cc:
Subject:
I am as well.
Bergeron, David
Tuesday, May 11, 2010 3:21 PM
Madzelan, Dan; Adams, Krist en; Shireman, Bob; Gomez, Gabriella
Hammond, Cynthia; Arsenault, Leigh
RE: Request for Data - Please let me know how long this will take
From: Madzelan, Dan
Sent: Tuesday, May 11, 2010 3:20 PM
To: Adams, Kristen; Shireman, Bob; Gomez, Gabriella; Bergeron, David
Cc: Hammond, Cynt hia; Arsenault, Leigh
Subject: RE: Request for Data - Please let me know how long this wi ll take
I'm avai lable at 11.
From: Adams, Kristen
Sent: Tuesday, May 11, 2010 2:03 PM
To: Shireman, Bob; Gomez, Gabriella; Bergeron, David; Madzelan, Dan
Cc: Hammond, Cynthia; Arsenault, Leigh
Subject: RE: Request for Data - Please let me know how long t his will take
Can we do a cal l with luke tomorrow at 11 am?
From: Shireman, Bob
Sent: Tuesday, May 11, 2010 1:16 PM
To: Gomez, Gabriella; Bergeron, David; Madzelan, Dan
Cc: Hammond, Cynt hia; Adams, Kristen; Arsenault , Leigh
Subject: RE: Request for Data - Please let me know how long this will take
I' ll take thi s for now.
From: Gomez, Gabriella
Sent: Tuesday, May 11, 2010 1:03 PM
To: Gomez, Gabriella; Bergeron, David; Madzelan, Dan; Shireman, Bob
Cc: Hammond, Cynthia; Adams, Kristen; Arsenault, Leigh
Subject: RE: Request for Data - Please let me know how long this will take
Hi all - Can we get on t he phone wit h l uke and his staff t o go t hrough t his list? They are anxious to know what we can
do. Thanks
From: Gomez, Gabriella
Sent: Friday, May 07, 2010 6:43 PM
To: Bergeron, David: Madzelan, Dan; Shireman, Bob
Cc: Hammond, Cynt hia; Adams, Kristen
Subject: Request for Data - Please let me know how long t his will take
Hi AlI- not sure the best person t o t al k to about this so I t hought I would send an email t o a few of you and hopefull y
you steer us i n the right directi on. Met wit h luke today and he asked for data on t he foll owing items. For all t hese
request s t hey wo uld like year by year informati on and any i nformati on that we t hink t hey would be i nterested in if it
J8
comes up in our research for th em. Please let me know how soon we can get this information and if it would be helpful
t o put someone on the phone wit h him. I know t here is a lot here so realize we may need to break t his up a bit. Thanks
Overall data questi ons/request s
• As a general question, what does NSLDSoffer?
• Would like i nformat ion from NSLDSversus IPEDSif possible
• On IPEDS is it possible to give them access t o the t abl es instead of j ust the info on t he websit e, need it for all for-
profit inst itutions
Specific data request s
• Graduation rates by schools over t ime
• Placement rates of schools over time
• Cohort Default Rat e Info - all requested by insti tution
o 2 year cohort default rate as well as 3 year cohort default rat e
o Is it possible t o do 4 year cohort default rate?
o lifetime cohort default rate
o All CDR dat a by schools and doll ar amounts not j ust percent ages (i f possible)
o Also all recovery rates for t he loans by sector over t ime.
• l oans in repayment by school and sector
• Informat ion on the li censi ng required for each stat e agency
• Total doll ar amount i ncl uding grants and loans for each instituti on
• Enrollment for all institutions, broken down by degree and if there are ot her factors that can be broken down
would like t o know those factors.
• Information on abi l ity t o benefit tests. Percentage of t ests used at i nsti t utions, in other words who gets in as a
result of t hese t est s at each i nsti t ut ion.
• 90/10 for all for-profit s over ti me
• list of for-prof it s on heightened cash management
• list of all d osed for-profit s in t he last 10 years and their accredi t ors.
Gabriell a Gomez, Assist ant Secret ary
Off ice of l egi slati on and Congressi onal Affairs
u.S. Depart ment of Educat ion
400 Maryland Ave., S.W.
Washington, D.C. 20202
(202) 40l-{)020
gabriel1a.gomez@ed.gov
39
From:
Sent;
To:
Subj ect:
Kanter, Martha
Friday, Apri l 30, 2010 7:32 PM
Yuan, Georgia
FW: Todays Wall Street Journal
From: Kanter, Martha
sent : Friday, April 30, 2010 7:32 PM
To: Rogers, Margot; Cunningham, Peter; Mill er, Tony; Gomez, Gabriella; Martin, Carmel; Rose, Charlie
Subject: Today's Wall Street Journal
htt p:Uonl ine. wsj.com/ art ide/5T-( 0 -20100430-715181.ht m11mod:WSJ latestheadlines
NEW YORK (Dow Jones)-This week's sell-off in for-profit school stocks, prompted by a report of a U.S. Department of
Educat ion official's speech, may have been overblown, some analysis say now that they have read a full transcript of the
comments.
The sector's shares fell sharply Thursday after trade Web site Inside Higher Ed reported that Robert Shireman, deputy
undersecretary for education, spoke harshly of market-funded colleges at a meeti ng of state school administrators and
accreditors Wednesday. The article, citing sources at the meeting, said Shireman compared the school s to Wall Street
firms whose actions helped cause the recent financial crisis. Inside Higher Ed, which didn't have a reporter at the meeting,
attempted to confirm the comments with Education Department officials, who declined comment for the articl e.
Shireman did make that comparison, according to a transcri pt of his speech, which analysts believe was relatively even-
handed and wide-ranging. He also said regulators could do a betler job.
More ...
From:
Sent:
To:
Cc:
Subject:
(b)(5)
Shireman, Bob
Wednesday, April 28, 2010 5:21 PM
Wol ff. Russell
Woodward, Jennifer; Manheimer, Ann
Re: Elimination of the Safe Harbors for Incentive Compensation
67
(bl(B)
Robert Shi reman
Deputy Undersec reta ry
U. S. Department of Ed ucation
(20 2) 260- 0101
From: Kantrowit z, Ma r k [Mark . Kantrowit z@Monst er. comJ
Sent : Monday, April 26, 2B1B IB: 39 PM
To : FINAID-l@LI STS. P5U. EDU
(c : Kantrowit z, Ma r k
Subject: Elimi nation of the Saf e Harbor s fo r Incentive Compensat ion
Sect ion 487(a ) (2B) of the Hi gher Education Act of 1965, as amended by
t he Hi gher Education Amendments of 1992, bans col leges f rom paying
68
commissions, bonuses or other f orms of incent i ve compensation based
di rect ly or i ndirectly on success i n secur i ng enrollments or f i nancial
aid. Thi s rest rict ion i s incl uded in the program parti cipation agreement
for institutional eligibility f or f ederal st udent aid funds available
through Tit le IV of t he Higher Education Act of 1965 and appl ies t o al l
col leges . i ncl udi ng publi c, non- prof it and f or-pr ofit col leges. Si nce
2002, the regul ations at 34 CFR 668. 14(b)( 22)( ii) have provided a set of
twelve safe harbors for activi t ies t hat are deemed to not violate the
rest r i ctions on incentive compensation. During negotiat ed r ulemaki ng for
Hi gher Education 2009- 10, however, the US Department of Education
proposed to r epeal the safe harbors because of concer ns about abusive
recruiting pract ices . Thi s st udent ai d pol icy anal ysis paper discusses
t he consequences of a r epeal of the safe har bors .
The paper can be found at
ht tp : / /www .finai d. org/educat ors/20100426incentivecompensation.pdf
The r eport is int ended to be descripti ve and pred i ct ive . I t does not
analyze dat a. As such t here ar e no key fi ndings or pol i cy
recommendati ons . The report does provide cl ar i t y on some of the l ikely
consequences of current ly proposed regul atory changes concer ni ng
i ncent ive compensat ion, and r evi ews rel evant hi st ori cal context .
The report may al so hel p col leges comp ly wi t h the US Depart ment of
Educat i on' s proposed regulatory changes i f they become fi nal. ( Please
note that thi s paper represents my persona l professiona l opi nion and has
no offici al st andi ng.)
Mark Kant r owi tz
Publ isher of FinAid. org and FastWeb. com
P.S. Pr evi ous student ai d policy analysi s papers and articles may be
f ound at
www.finaid .org/ studentaidpol icy
---------- --------- --- ---- ------- --- ---- --- ----._-
Mark Kantrowi t z
Publisher of Fi nAid. org and Fastweb . com
Aut hor, Fast Web College Gold
FinAid Page l lC
PO Box 2056
Cranberry Township. PA 16066-1056
Tel : 1-724 - 538-4500
Fax : 1-724-538- 4502
Emai l : mkant@finaid . org.mkant@fastweb . com
www.fastweb.com www.finaid. org
NOTI CE:
Thi s message, and any attachments. cont ain(s) informati on that may be confidential or
protected by pri vilege from disclosure and i s intended only f or the individual or entit y
named above . No one else may di sclose. copy. distribute or use t he content s of t hi s message
f or any purpose . I t s unauthorized use. di sseminati on or duplication i s strict ly prohibit ed
and may be unlawful . I f you r ecei ve t his mes sage i n error or you otherwi se are not an
aut hori zed reci pient, pl ease immediatel y delete the mes sage and any attachment s and not ify
t he sender .
70
From:
Sent:
To:
Subject:
How???? ?????
Bergeron, David
Tuesday, Apri l 27, 2010 12:22 PM
Yuan, Georgia; Shireman, Bob
RE: FYI
I had a cal l f r om an analyst thi s morning and sai d we 're not tal king about GE . . .
-- - --Origi nal Message- - - - -
Fr om: Yuan, Geor gi a
Sent : Tuesday, April 27, 2010 12:20 PM
To: Bergeron, David; Shireman, Bob
Subject : FYI
htt p: / /onl ine .wsj .com/art icle/BT-CO- 2010e426-710339.html?mod=rss_Hot_Stocks
APRIL 26, 2010, 10:57 A. M. ET
Debt , Job Rule Uncertainty Hi t s Shar es Of For -Prof i t Colleges NEW YORK (Dow Jones ) - -A
government proposal to hold col leges account able f or graduating st udents with hi gh debt l oads
and l ow i ncome levels came f ront and center , agai n, aft er Credit Suisse anal ysts r eversed
t heir ass umption t hat the Depar t ment of Educat ion had softened its stance on t he subject .
Monday morning, Credi t Suisse i ssued a not e sayi ng the Depar t ment of Education has r etur ned
to a st i f fer set of r ul es on post - graduat i on debt and gainful employment l evel s that colleges
must meet. The news hi t share pr i ces of fo r-prof i t uni ver si t i es that had ral l ied on expect ed
softer r ules .
Credit Suisse downgraded I TT Educational Services I nc . ( ESI) and DeVry Inc . (OV) to neutral
from outperform and slashed their pr ice target s, ci ting the potential fallout from their new
take on gainful employment as well as concerns of countercyclical ity. I TT recent ly was off
2.9%to $108. 53, while DeVry was down 6.5% to $64. 96. Credit Suisse had upgraded the schools
t wo weeks ago .
Ot her f or -prof i t schools, i ncl uding St rayer Educat ion Inc . (STRA) , Career Educat ion Cor p.
(CECO) , Corinthi an Col leges Inc . (COCO) and Apollo Group I nc. (APOL) , were also t r adi ng down .
The Department of Educat ion ori gi nal ly sa i d schools coul d fa ce scr ut i ny t hat coul d put
f eder al as si stance- -of ten the primary r evenue st r eam fo r f or - prof i t col l eges-- at ri sk if t hey
di d not have at l east a 70% graduat i on r at e and 70%j ob pl acement in fi eld of st udy, Two
weeks ago, Credi t Suisse, and ot her s , sent out notes saying t hey believe the Department of
Education had softened t he graduat ion level to 50%, sending shares hi gher, wit h some hi t ting
52-week hi ghs .
"Oddly, we suspect t he big upward move the st ocks had when the i nvestment communi ty found out
about the 50%exemption may have led to pr ess ur e on the DOE to remove the 5e%exemption," the
firm wrote Monday.
Some education insiders have had mixed f eelings on pr edi ct i ng the gai nful-employment meas ure ,
argui ng that i t's i mproper t o say what the Department of Educat i on wi l l put fort h and i t's
bes t t o wait unt i l the of f i ci al pr oposal i s r el eased f or public comment. That wi l l happen by
mi d-June .
"I ' m not sur e who t hi nks they have what access t o what ' s i n t his draft, " sai d one for - profi t
school off icial, but "I wo ul d r eally not be j umpi ng to any conc l usi ons just yet . " He sai d
t here 's no way of knowing "whet her i t ' s bee n har dened, softened, pureed, whatever . "
Repr esent atives f r om t he Depar t ment of Education we ren't immedi ately avai lable fo r comment.
IBD I ndust r y Themes
Rumor s Swirl, Li ft And Sink School Stocks By VICTOR REK lAITIS, INVESTOR' S BUSINESS DAI LY
Posted e4/26/2010 06:23 PM ET
71
News of a r egul at or y exempt ion provi ded a big boost on April 13 t o DeVr y (DV), ITT
Educational Services (ESI) and other school stocks .
So mu ch for that exemption.
On Monday, DeVry and ITT tumbled amid reports that they mi ght not get a pass in new Education
Department r ules after all .
The Education Department i s wor king on regulat ions that would link graduates' income t o their
st udent - loan payment s .
Credit Suisse sai d on April 13 that there could be an exempt ion f or schools with a 50%
completi on r ate and a 7a% job- placement rate.
That exempt ion l i kely would hel p DeVry and ITT, t he bank sai d t wo weeks ago as i t upgraded
those two school stocks to outperform.
But on Monday, Credit Suisse sai d its Washington sour ces think t he exemption may not make i t
in the new regulations .
The bank downgr aded DeVry and ITT t o neut r al.
Credit Suisse al so expressed concer n about a recent DeVry warni ng about slowi ng enr ollment in
one unit, as well as an ITT warni ng about increased adverti sing expenses . Enrol l ment has been
ri sing for for-profit educators , but that t r end coul d end as the j ob market improves.
DeVr y slid 5. 8% to 65. 45 on Monday, dropping below its 10-week moving average in heavy
t ur nover . It had cl imbed as hi gh as 74.36 after a r ebound off its 10- week line .
ITT Educational al so fell hard and sliced through its l 0-week line, though it recovered to
end the day down j ust 1. 2%.
Another school st ock t hat slid was top- rated Grand Canyon Education (LOPE) , down 1.1% i n
bel ow-average vol ume .
The stock stands 9%bel ow a hi gh reached on Apr i l 13. It has not been i n a proper buyi ng
r ange fo r several weeks, but i t may be nearing its la-week moving average .
DeVry fa l ls after analyst downgr ade
Bloomberg NewsPublished : 4/ 26/ 2010 12:13 I TT Educational Services Inc. and OeVry I nc . f ell in
New Yor k t rad ing after a Cred it Sui sse Group analyst said the U. S. government may make it
harder f or the compani es ' student s to get f inancial ai d.
DeVry, based in Oakbrook Terrace, fell $4.58, or 6. 6 percent, to $64. 88 at 12: 01 p.m. in New
Yor k Stock Exchange composi te trading after the Bost on- based analyst, Kel ly Fl ynn, cut her
rating t o "neut r al" f rom ftoutperform." ITT Educat i onal , based i n Carme l, I ndi ana, fel l $2. 37,
or 2.1 per cent, t o $109. 41 after i t was al so cut t o "neutral . "
Departme nt of Education rul es may requi re education companies t o show t hat graduat es ear n
enough t o afford repayment of their st udent loans . An exempt ion t o the r egul ations that woul d
have eased r estrictions on st udents ' access to l oans may be dropped from t he proposal , which
may be made publ i c i n May or June, Fl ynn sai d today.
"We expect sector t o r emain vol ati l e i n coming weeks as regulat ory process plays out," r I ynn
wrote i n a not e t o cl i ent s .
72
The r ecoveri ng economy may al so hur t the for- profi t col leges if st udents can get jobs rather
than sign up f or cl asses , Fl ynn sai d.
- - - - ~ ~ - - - - - - - - - -
73
From:
Sent:
To:
Cc:
Subject :
Paul ine Abernathy (pabernathy@ticas.org}
Monday, April 19. 2010 11:20 AM
Kanter, Martha; Shireman, Bob; Arsenault, Leigh; Gomez, Gabriella; Manheimer . Ann;
Madzelan, Dan; Kvaal, James R. ; Gordon, Robert M.
Debbie FrankIe Cochrane; lauren Asher; Connie Myers
Analysis of CCA paper on gai nful employment
Attached is a brief TI CAS memo to interested parties on the Career Ccllege Association-
commissioned paper on gainf ul employment. It notes that their own analysis found that:
• St udents from for-pr ofit colleges are much more likely to default on student loans. Accordi ng to their
own analysis, even after controlling for demographic differences among students, for-profi t college students
are twice as likely as other college students to default;
• Few for-profit pr ograms would be affected by proposed defini tion. Their own analysis found that onl y
a small minority of for-profit programs currently do not meet the proposed 8-percent median debt-to-income
ratio test (al though those programs currentl y enroll 1/3 of their students); and
• No loss of student access to college. Their study indicates that other colleges would be well positioned to
absorb the students who might have enrolled in programs that failed to meet the test-and would serve them
much better.
TICAS memo on
: RA Report 4 ~ 1 5 _ ..
Pauline Abernathy
Vi ce President
The Institute for College Access & Success
www.ticas.org and www.Q!Qjectonstudentdebt.org
We moved! TICAS' main number is now 510.318.7900. My direct line is 510.31 8.7903.
80
From:
Sent:
To:
Cc:
Subject:
J 'U ask Nces.
Bergeron, David
Thursday. April 15.20106:45 AM
Shireman. Bob
Madzetan, Dan
RE: Data for GE
J'll have t hem include cdr s i f possibl e t oo.
From: Shi r ema n, Bob
Sent : Thursday, Apri l 15, 2010 4 : 17 AM
To: Bergeron, Davi d
Cc : Madzelan, Dan
Subject : Data for GE
Can you get an excel f i l e of graduat ion and retent ion rates by institut i on and t ype?
89
Secretary Duncan' s Speeches June-Mav 2010
Can be found at: http://www.ed.gov/news/speeches/latesUindex.html
li st ed by date and speech name
The Roadmap to Reform
Remarks at Fourth Annuai lES Research Conference
Data- First of Four Assurances
June B, 2009
States Will Lead the Way Toward Reform
Remarks at 2009 Governors Education Symposium
Higher Standards and Assessments-Second of Four Assurances
June 14, 2009
Turning Around the Bottom Five Percent
Remarks at National Al liance for Publ ic Charter Schools Conference
Turnarounds- Third of Four Assurances
June 22, 2009
Partners in Reform
Remarks at National Education Association
Teacher & Principal Quality-Fourth of Four Assurances
July 2, 2009
Race to the Top Begins
Remarks at the U.S. Department of Education Department Auditorium
RTlT, need for change
July 24, 2009
National Council of La Raza
Reducing the dropout ratel boosting st udent achievement
Improving educational attai nment among Hispanic st udents
July 2B, 2009
From Compliance to Innovation
Remarks at America's Choice Superintendents Symposium
Need for innovati on and change & i3 Program
August 20, 2009
9
HBCUs and Higher Education: Beyond the Iron Triangle
Remarks at National Historically Black Colleges and Universities Conference
Challenges of HBCUs and higher education in general
Improvi ng the college pipeline
College Access and Completion Fund
September 2, 2009
Reauthorization of ESEA: Why We Can't Wait
Remarks at the Monthly Stakeholders Meeting
Reauthorization of ESEA
September 24, 2009
Building Safe and Healthy Communities
Remarks at City Hall in Chicago
Call f or a national conversation on values, building healthy communities
October 7, 2009
Make No Small Plans
Remarks at the Grantmakers for Education Conference in Chicago
Need f or transformational change
The i3 Fund, Early l earning Challenge Fund, Harlem Children' s Zone
OCtober 7, 2009
A Gall 10 Teaching
Remarks at The Rotunda at the University of Vi rginia
Need f or an anny of new teachers
October 9, 2009
Partners for Success
Remarks to the National Association of State Boards of Education
Federal role, president'S goal, innovation, ESEA reauthorization
October 16, 2009
Teacher Preparation: Reforming the Uncertain Profession
Remarks at Teachers College, Columbia University
Need for change in schools of education and teacher preparation
October 22, 2009
10
Remarks to the President's Council of Advisors on Science and Technology
Need t o Improve performance In STEM, increase st udents' global
competitiveness
October 23, 2009
Economic Security and a 21st Century Education
Remarks at the U.S. Chamber of Commerce's Education and Workforce Summit
Federal role; reauthorization of ESEA; ways to invest in education
November 9, 2009
The Promise of Promise Neighborhoods: Beyond Good Intentions
Remarks at the Harlem Children's Zone Fall Conference
Community schools, Promi se Neighborhoods, year-round education, civil r ights
November 10, 2009
The Early Learning Challenge: Raising the Bar
Remarks at the National Association for the Educati on of Young Children Annual
Conference
Importance of ear l y learning and development, Early l earning Challenge Fund
November 18, 2009
Lawmakers Who Lead
Remarks to the National Conference of State Legislatures
States' role in reform, McKInsey report , education and the global economy
December 10, 2009
Investing in Education
Remarks to the Nat ional School Boards Association
Fiscal 2011 Budget
February 1,2010
Using Technology to Transform Schools
Remarks to the Association of American Publishers Annual Meeting
Draft Education Technology Plan
March 3, 2010
Crossing the Next Bridge
Remarks on the 45'" Anniversary of "Bloody Sunday
Ci vil rights agenda
March 8, 2010
11
A Blueprint for Reform: The Reauthorization of ESEA
Testimony before House and Senate authorizing committees
ESEA reauthorization
March 17. 2010
Statement on Race to the Top Phase 1Winners
Remarks for call with media
Race to the Top
March 29. 2010
The Well-Rounded Curriculum
Remarks to the Arts Education Partnership Nat ional Forum
ESEA reauthorization and the Importance of a well-rounded cur riculum
April 9. 2010
Keeping the Promise to Al l of America's Children
Remarks to the Council for Exceptional Children
Special education and accountabil ity
April 21. 2010
Success as the Norm
Remarks to the KIPP Annual Dinner
Taki ng success t o scale
April 30. 2010
Looking in the Mirror
Remarks to the Mom Congress
Parent Involvement
May 3.2010
12
TO:
FROM:
DATE:
RE:
MEMO
Interested Parties
The Institute for College Access & Success
Apri l 15, 2010
Charles River Associates Report on Gainful Employment prepared for the
Career College Association
The Career College Association (CCA) recently commissioned a study of how their
institutions and programs would fare under an Education Depart ment proposal for defining
gainful employment. ' As a condition of participat ing in federal student aid programs,
federal law has long requi red most programs offered by for-profit institutions and any
program of less than two years to "prepare students for gainful employment in a
recognized occupation." Yet there is no official definition or"gainful employment." With
enrollment in these programs rising rapidl y- now accounting for nearly I in 4 federal Pell
Grant and federal student loan dollars- the Obama Administrat ion has proposed defi ni ng
gai nful employment.
Using data provided by CCA and not publicl y avai lable, Charles River Associates (eRA)
found:
• Students from for-profit colleges arc much more likely to default on st udent loans.
According to their own analysis, even aft er controlling for demographic differences
among students, for-profit college students are twice as likely as other college students
to default;
• Few for-profi t programs would be affected by proposed definition. Their own
analysis found that only a small minority of for-profit programs currently do not meet
the proposed 8-perccnt medi an debt-to-income rat io test; and
• No loss of student access to coll ege. Their study indi cates that other colleges would
be well positioned to absorb the students who might have enrolled in programs that
failed to meet the test-and would serve them much better.
Their own fi ndings therefore further support the Administration' s proposing a clear and
enforcable defini tion of gainful employment that will prevent taxpayer dollars from being
used to subsidize programs that leave students worse off than before-deep in debt and no
better prepared for gai nful employment.
Twice as Li kely to Defaul t
Demographic factors, such as income. gender, race and fami ly size, playa rol e in the
likelihood of defaulting on federal student loans, but they do not tell the whole story. CRA
controlled for these and other factors to deter mi ne the effect of a student' s school on the
likelihood of defaulting, and found that students attending for-profit colleges were twice as
likely to default as students at other colleges.' Even if all students at for-profits completed
their academi c programs, CRA estimates that about 12 percent of their students would still
default on their student loans, compared to about six percent at community colleges after
controlling for demographi c differences.
Few Programs Would Be Affected
Using CCA data on student graduation, tuiti on charges, and indebtedness for more than
10,000 academic programs, CRA found that 82 percent of for-profit school programs
would currently pass the Department' s proposed 8-pcrcent median debt-to-income test.
The Department' s proposal is intended to ensure that the majority of graduates of a
particular program arc able to repay thei r loans without hardship, and more than four out of
fi ve for-profit programs would meet this standard. The Department has also offered two
alternative ways for colleges to demonstrate that their programs are suffi ciently preparing
students for gainful employment, but the eRA report does not estimate the effects of these
alternatives. It is possible that some or many programs will meet one of these alternative
gainful employment standards, narrowing the share of affected programs even further.
No Loss of Student Access
Colleges with programs that cannot demonstrate that they are adequatel y preparing
students for gainful employment under any of the proposed standards will have several
options. They could improve their program quality so that students are better prepared for
employment opportuniti es, or they could reduce what they charge so that students are
better able to repay what they borrowed to attend the school. This is similar to what
happened when the Department first began enforcing sanctions for very high cohort default
rates. In response, many schools adj usted their practi ces to lower their default rates so the
schools would remain eligible for federal student aid, and the share of students default ing
on their student loans decreased substantially.
Even if some schools choose to eliminate. rather than change, a program, students
currently enrolled in these programs will have plenty of options, including enrolling in
public, private non-profit, or the vast majori ty of for-profit programs that meet the
Department' s proposed standards. While enrollment has increased in all college sectors,
state budget short falls and shri nking endowments have limited many publi c and nonprofi t
colleges ability to increase enrollment. Given that the vast majority of for-profit college
programs currently meet the Department ' s gainful employment standard, and the sector
says it has the ability to rapidly expand enrollment, students will still have plenty of
options, but at a lower cost and greater benefit. Taxpayers and the economy will benefit as
well from lower student default costs and a better-trained workforce.

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